Some Common Debt Consolidation Mistakes to Be Avoided by Single Moms
According to the statistics provided by the U.S. Census Bureau in 2017, out of approx. twelve million families headed by single parents, with kids below 18 years of age, over 80 percent were actually, run by single moms. Over 40 percent are known to live in poverty. Single mothers do not just imply teen moms and those mothers whose partners do not wish to be involved. Single moms could also comprise divorcees, widows, single women by preference, and even those single women whose kid’s dads are unknown or not able to contribute. Single moms are known to encounter incredible challenges, particularly, when they get no support emotionally or financially from their child’s father.
You could well imagine the sorry plight of the single mothers when you know what they feel as presented by Huffington Post at https://www.huffingtonpost.com, “Public assistance through the form of WIC, food stamps, Medicare and TANF, not only helps us make ends meet, but also give us added means to allow us to save a small amount of money, and provide ourselves a safety net should an emergency arise. There has been a lot of talk about entitlements lately. As a single mother, I have never felt “entitled” to the few benefits that I receive. I have only felt grateful.” About 27.5 percent of the single moms were jobless throughout the year and 22.4 percent got unemployment benefits. Only 50 percent of the single mothers had a full-time job and were employed throughout the year.
Single mothers are, therefore, forced by circumstances to take loans. Needless to mention, it is quite natural for them to often get trapped in insurmountable debts and they even have quite poor credit scores.
Single Moms & Debt Consolidation Mistakes
After months of excessive mental stress from accumulating credit card statements and never-ending aggressive collection calls, when you decide to opt for debt consolidation, you feel relieved and are ready to forge ahead with confidence and enthusiasm toward a debt-free future. Debt consolidation is a huge relief as with just a single debt to owe, there is no reason to now worry about multiple payments to numerous creditors.
You no longer are scared of missing deadlines as life is pretty tough when you need to remember severable due dates at different times in a month. However, in your frenzy, do not go overboard and try to avoid some of the most common debt consolidation mistakes. Remember taking out a debt consolidation loan is just the first step toward stabilizing your personal finances and getting out of the insurmountable debts. Even though it is quite tempting to put your hair down and relax once debt consolidation has been done, you need to be careful as certain mistakes could ruin all your endeavors and put you back on the debt track. Let us explore some frequently made debt consolidation mistakes.
Mistake: Not Understanding the Root Cause
You need to fully know and understand how you got into so much of debts. Debt consolidation could act as a Band-Aid solution. When you have successfully managed to consolidate your multiple debts, you need to stay on top of one single monthly payment and keep monitoring spending. You need to determine the root cause that led you to an insurmountable mountain of debts. You are making a serious mistake if you are overlooking the real reason how you landed up in so much of financial distress and trouble. You must understand and acknowledge the seriousness of the situation and determine how you got to such a distressing stage in your life. Debt consolidation is supposed to be a great starting point to clean up all your finances and start reflecting. Make the needed lifestyle changes and curb your spending habit so that you do not reach this point again in the future.
You must understand your vulnerabilities and be aware of the triggers. Are you an impulsive online shopper? Are you constantly using your credit card for buying snacks and lunch? Once you have identified the negative patterns or weaknesses, you simply need to chalk out an appropriate plan and steer clear of the spending pitfalls which were responsible for you getting into the debt trap in the very first place. You must go through a debt consolidation review from time to time to learn more about debt consolidation and how to stay on top of it.
Mistake: No Plan for Paying Off the Debt Consolidation Loan Timely
A consolidated loan may take a number of years for you to pay it off in full particularly if you are only taking care of the minimum payments each month. It could prove to be a tedious journey toward being totally debt-free. Things could get even worse if you are constantly adding in new debts along the way. In certain cases, you would need to pay heed to the pre-defined deadlines. When debt repayment strategies are chalked out by the professional credit counselors, for instance, when the creditors and the debtor agree on the debt being repaid within a period of three-five years, you must abide by that.
Mistake: You Are Getting Into Scams Unknowingly
You must never forget that when you are mentally distressed and agonized with ever-mounting debts, you become an easy victim to predators who are always there waiting to take undue advantage of the situation. Do not get carried away by sales pitches. Remember to check the credentials and certifications of the debt consolidation agencies. Single moms take extra care in reading and understanding the fine print. Do not choose a debt consolidation firm impulsively. Go ahead only when you have facts supporting their authenticity and efficiency.
If you pay attention to firmly making certain lifestyle modifications and sticking to them, you would be gliding along smoothly toward your goal of a debt-free future. You may even end up being ahead of the repayment schedule. You may simply wish to pay off your debt consolidation loan as a top priority and make accelerated payments. The choice is yours. Just stay accountable throughout the loan repayment process and make the necessary tweaks whenever needed.