This post is sponsored by Diamondlinks. Any opinions expressed are my own.
I’m going to tell you a personal story. I’ve told some of my financial journey on this blog before. I wasn’t always so savvy with money. It took me learning the hard way then educating myself to fix it. I’m going to tell you a story about a piece of bad advice I once got from a realtor when we were trying to buy a house about 15 years or so ago.
It started off with me and my (now ex) husband living in a small apartment in SC with a new baby. My husband, of the time, had just got promoted but didn’t get as much of a raise as he thought he would get. I was trying to be a stay at home mom with my son. Mostly because we had just moved to SC and I needed to get my OT license squared away in SC. Long story short, we started getting behind on credit card and student loan payments. I talked to one of the credit card companies and they suggested I try credit counseling. I was willing to give it a go and so was my husband. So we did. It rolled everything together and made things much more manageable for us. Yes they did roll a fee into the payments but it made it better for us to budget and were were able to get back on track.
Fast forward a couple years and we want to build a house in Elgin, SC. We were still paying on the debt consolidation and doing well with it. The our realtor, (who seemed a bit uppity) kind of looked down on us for being in debt consolidation. She told us that we needed to get out of it because it was slowing our credit down and it wouldn’t look good on our mortgage application (even though we had already been paying on it for about 2 years and only had about a year or so to go. Well we really wanted to buy a house and we figured she was probably the expert on this so we got out of the debt consolidation.
Well all that money we paid in then basically meant nothing after that. Creditors were calling us trying to get their money. We were overwhelmed everyone wanted all their money right now! Hindsight being 20/20 we should have never bought a house anyway but we ended up being approved for a mortgage through Countrywide. Yep the mortgage lender that ended up getting in all kinds of controversy now long after. We were in over our heads. Honestly I think that whole thing sealed our financial doom at the time. When I look back on it, I wish we would have stayed in the debt consolidation program, paid off our debt, and been denied for the mortgage and just stayed in an apartment. Especially, again with hindsight being 20/20, my ex and I ended getting a divorce not long after anyway. And NO it was NOT all financial related.
The reason I’m telling my story is that you have to find what works with you in your budget. Sometimes debt reduction can be just what a person need to get back on track. You might pay a little longer but in more manageable payments or in some cases maybe help you erase some debt. Companies like Nationwide Debt Reduction Services even offer ways to help with student loan debt.
Bottom line is, I don’t think there is a cookie cutter way to get out of debt. I think you need to do your research and decide what’s best for you.