Consildating debt

“Print out some pictures of that beach and plaster them all over your house as a reminder.” Broadway says.

“So don’t beat yourself up too bad.” A couple thousand dollars of credit card debt might be the result of years of bad decision-making, and it might take a few years of good decision-making to dig yourself out.

The new rate and monthly payments are lower, which may improve your cash flow, but the longer term means you’ll pay more interest.

However, you should also avoid shortening the loan term to the point where you can’t afford the new monthly payment, says Colin Moynahan, a certified financial planner and founder at Twenty Fifty Capital.

In fact, debt consolidation — and the lower monthly payment it often leaves you with — can lull you into a false sense of resolution.

In college, Dominique Broadway (now the CEO of Finances De•mys•ti•fied) was the most financial-savvy person she knew. By 25, she had ,000 in the bank and was driving a BMW to and from her job as a wealth management advisor.

Known as a debt consolidation loan, it can simplify your payments by rolling multiple bills into one, lowering your interest costs and helping you get out of debt faster.Use a debt consolidation loan calculator to see how rates and loan terms impact your payments.What’s real: Debt consolidation loans often require a hard credit pull when you apply, but that typically shaves only a few points from your credit score.After you’ve made the decision to consolidate your debt, Broadway recommends sitting down and looking at every dollar that came in or out over the past few months. “You should make sure the payment hurts just a little bit,” Bellfy says.“If you pick a debt consolidation plan that spreads your payments out over 15 years, you might only be paying a few hundred dollars a month, and your debt won’t be as noticeable.” That’s when people get a little too relaxed and start racking up debts again, he says.

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