In part 1 we talked about how to actually get debt free yourself. In part 2 we will talk about the advantages and disadvantages of doing this strategy.
Advantages
- The consumer is in full control. Again, as I have talked about this in part 1 of these articles. You have complete control of how you would like to get debt free. If you would like to take a more conservative approach and pay off your debts slowly it works. If you decide that you would like to take a more aggressive approach and cut expenses quickly feel free to do so.
- No damage to your credit. This is one of the greatest reasons right here. Saving your credit can save you a huge amount of time and energy. Without damaging your credit reports and you can get back on track much more quickly. However I must make one point though. This holds true as long as you don’t miss any payments. Which is truly the kiss off death to your credit report. Missing one payment on anything can kill your credit.
- Saves your reputation. If you don’t want this to end up in the eye of the public this can be an excellent way to conceal that. As with bankruptcy your reputation tends to go down the tubes for a long time, 10 years to be exact.
Disadvantages
- You Must be disciplined. If you expect to get debt free you must stay disciplined and focused. Getting out of debt is not easy. With all the negative collection calls, bills, notices, and forclosures it’s easy to get depressed of the situation. You will have to be tough as nails.
- Establishing an emergency fund. This can be a tough issue considering that you don’t want to create anymore credit or use any of your credit cards. Although once you have paid off your debt this is the first thing I recommend to do. An emergency fund will create a sense of balance that will let you breath and also not put you back into a rut once an unexpected bill comes along. I also want to add that using your credit cards as your emergency fund is also a bad idea.
- Failure to make extra payments and increase in debt. This could be the biggest disadvantage to the program. If you stop paying the extra payments and debt increases you could be in for some serious issues. In fact if it builds up to much it could turn into a situation I seen an individual go through once where she had so much debt that she couldn’t even make her minimum payments and get by.
When should you start?
As soon as possible. Don’t delay. You may even be thinking that you don’t have much debt and believe you don’t need to be in this program.
It’s never to late.
Give yourself the benefit of the doubt. Start now. I’ve known people who have had great financial situations and just because of a little pride and overspending have put themselves into terrible situations.
Call to Action.
- Start gathering your bills now.
- Write out how you will pay them off.
- Put a plan together and put it in a familiar place.
- Read it twice a day. Morning and evening.
- Stay focused and pay off your debt!
If you haven’t read part 1 you can do so here.
