Getting out of credit card debt often takes major financial sacrifices accomplished by a frugal lifestyle. During the Great Recession, a lot of consumers stopped spending money. But adopting frugal habits for long periods of time results in frustration or what’s often called “frugal fatigue.” According to an article by time.com, frugal fatigue is one of several debt consolidation traps to avoid with proper debt counseling. When you receive debt counseling, you learn to take a more balanced approach to paying off debt. By working with an accredited company such as Christian Credit Counselors, for example, you likely learn how to pay a realistic portion of your income toward a debt repayment plan.
Using it Debt Consolidation as a tool
When you consolidate debt, don’t think of it as the end of your personal finance journey. Instead, think of it as one step in the process. Debt consolidation is a tool that helps you get out of debt, but it won’t change your spending patterns. With debt counseling, you dig a little deeper into the why behind your credit card debt. You brainstorm solutions for the future, setting goals and planning with emergency savings. To avoid frugal fatigue, make sure to budget for some fun activities as well as the necessities. A trained credit counselor will free up money in your budget by achieving a lower interest rate on the debt you accumulated over time.
Avoiding debt settlement
In most cases, debt settlement is a scam intended to dupe consumers into spending money without actually getting to the root of the problem. Your credit score will likely be ruined by failing to work with creditors or pay back what you owe. Instead of debt settlement, sign up for a debt management plan through Consumer Credit Counselors. In some cases, you pay off your debt in just three to five years. Some people think debt settlement is the better solution because they don’t pay anything toward debt. In reality, you could end up being sued by your creditors or being forced into bankruptcy.
After getting out of debt with your debt management plan, don’t fall into the trap of spending wildly. You can keep your frugal habits such as using discounts and coupons, buying generic brands, watching movies at home and buying less expensive cars. The key is to only splurge on special occasions when you can comfortably afford to treat yourself or your family.
At Christian Credit Counselors, we help our clients pinpoint the reasons they got into debt in the first place so they stay with the debt-free lifestyle. Find out how freeing it is to pay off what you owe in terms of credit card debt.
Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.
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