Overextended Finances and How Debt Consolidation Helps

Jeanne McTaggartDebt Consolidation

Debt Consolidation

If you are financially overextended, you can’t pay your bills on time even though you want to. You likely felt embarrassed when a cashier declined your credit card in the past. By signing up for a debt consolidation program, you take control of your situation and reduce financial stress. According to a recent piece by U.S. News & World Report, there are various signs that point to the fact a person is financially overextended. The National Foundation for Credit Counseling conducted a survey that showed 1 in 3 adults carry credit card debt from one month to the next month. Fifteen percent of people have more than $2,500 worth of credit card debt that gets forwarded to the next month’s billing cycle.

Paying your bills late

If you are paying your bills late, it’s likely you have more money going out than money coming in. Although increasing your salary can help, you can also reduce how much you owe. By meeting with a credit counselor, you can get started on a Debt Management Plan. Your credit counselor will negotiate a lower interest rate on your various credit cards. In the long run, you’ll pay significantly less money on interest charges and fees. By consolidating debt, you also get a lower monthly payment so you can afford to pay other bills on time as well as your one main debt repayment bill.

Failing to fund an IRA

If you can’t afford to fund a Roth IRA, you are financially overextended. It’s also a bad sign if you can’t contribute to a 401(k), at least up to the amount your company matches. While putting money in a Roth IRA seems like a luxury, it’s actually a necessity. Most experts predict a retirement crisis because people aren’t saving enough for retirement. With credit counseling, you will budget for retirement savings instead of neglecting it.

Putting very little down

Although it’s possible to get a financing for a car with no money down, it’s another sign that you are financially overextended. New first-time homebuyers programs allow borrowers to put down as little as 3 percent. If you are only in the position to put down little or no money on a purchase, consider consolidating your debt. You will pay off your credit card debt quickly, which frees up a lot of money for the things you need to buy.

Some bad financial habits that you need to break right away include getting payday loans to cover bills and maxing out your credit cards. At Christian Credit Counselors, our trained and certified credit counselors have helped hundreds of clients get out of debt and stay out of debt for good. The secret of our success is how we combine education with practical steps such as signing up for debt consolidation.


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