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So, you've gotten behind in the bills, and now can't make the minimum payments. You have some equity in the house, and have thought about taking out a Home Equity Line of Credit, and consolidating your bills.

Danger, Danger Will Robinson!!

This is just the type of situation that can either tip you into a debt abyss that may take decades to get out of, or lead you down a path of solving the PROBLEM not the SYMPTOM.

Money Issues

With many sources talking about recession, foreclosures, and the attending layoffs and downsizing, there isn't that much good news in the financial markets today. That's not a reason to make bad personal finance decisions though. Take a few minutes and consider your options before jumping on the Consolidation Bandwagon.

• Can you Work with existing Creditors to get your existing bills lowered?
• Have you given any Debt Counseling Services a call for information?
• Have you thought about what you can 'scale back' in your lifestyle to make ends meet?
• Have you considered an extra part-time or second job to get you through the tough times?

All of these alternatives to debt consolidation try to address the problem (spending too much money) by either increasing cash flow or decreasing spending.

Simply transferring debt to another debt doesn't get rid of any debt! It's a juggling act that will eventually come back to bite the juggler. Getting into the habit of moving debt from credit card to credit card is fine, until those credit card companies stop offering you attractive interest rates and that's starting to happen now!

Psychological Issues

By addressing the symptoms, the problem continues on. Making a lifestyle change isn't the easiest thing in the world, but it's more lasting than paying Peter by transferring it to Paul. At some point an unexpected event is going to occur (loss of a job, medical expenses, unexpected major expense) and the finances will start to fall like dominos. That ISN'T the time you want to come to your senses about how to handle debt.

You may be like myself, and not raised by your parents to handle debt very well, but now you can be the teacher and the example for your own kids. You also have a lot more opportunity to lean the pitfalls and drawbacks of debt than your parents did. (After all, they didn't have the opportunity to read THIS blog ).  Take the time to consider the long-term ramifications of your decisions, not only on you, but on your kids and their kids. Don't continue the 'family tradition' of debt.

Alternatives

The good news is that little changes have a big effect. If you can re-examine your lifestyle, you'll see lots of things that can be eliminated without affecting your level of happiness. Additionally, I'll bet that if you put your mind to it, you can make some extra money in ways that you hadn't even thought about;

• Sell some of the stuff you've accumulated and never used
• Start a home-based business in your spare time
• Get a part-time job
• Turn that hobby into a money making activity.
• Ask for the raise at work that you deserve but haven't gotten yet.

Necessity is the mother of invention, and today, that necessity is at it's greatest.

There are so many things that you can do to earn extra money, if you put forward a little effort that it's amazing. It might not feel that way at first, but even $10-20 here and there adds up to a considerable amount. Use your ingenuity and research your options. Try different things. Many will fail, but some will start working. Your best tool is perseverance.

Never Give Up, Never Say Die!! 

If you have a comment or an idea for extra income, we'd love to hear it. Leave us a note!

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