We are all living in a society where a common feature is the desire for more and more luxury items.
However we are not happy with simple pleasures any more and the only things that excite us and which become objects of our desire must be expensive. Life costs much more that it did in previous generations when people were content with much less and often the sort of things that they enjoyed cost nothing or at least very little
Years ago families appeared to be closer knit, as did in fact whole communities, and many a happy evening was spent round the fire enjoyng the mother playing classical pieces by Chopin and Brahms while the rest of the family sang.
Other evenings were spent with the whole family playing cards or reading books happily together in the parlour. Children in those days did not demand the expensive trainers that children these days insist on having. Very few families owned a car and the roads were safer and much less crowded than they are now, and those who did own a car bought it by money they had saved.
The motto then was that you only bought anything if you could hand over the cash in full for it, and in those days hire purchase held no appeal, unlike now.
Leisure time then was filled with playing in the local park where children rode their bikes and played with their sail boats in the pond in the park.Homes in past generations were more basic than now as no one wanted to borrow to pay for these items unlike now.In addition to this most women did not work and as such household income was less than it is now.
Even though children in the past did not have luxury homes and gardens with garden rooms, etc. they were probably richer in something far more important than these home comforts. What they in fact had was an adoring mother waiting at home for them with a home cooked meal ready for them at the end of a school day
Now people want the best of everything such as fancy cars, expensive home improvements and foreign holidays.
Mainly the luxuries of life are paid for by loans, hire purchase and credit cards and when these all mount up it can be a struggle to pay them all. Credit cards have very high interest rates and can easily become out of control and people then realize that the good things that they have enjoyed have come at too high a price and particularly costly to their state of mind.
It is then that something must be done to sort out the problem of too many debts and the best way is NOT by consolidating all your debts into one big debt!
This debt consolidation unites all the debt into one payment, and for homeowners consolidation loans are achieved by a remortgage or a secured loan which are homeowner loans secured against the property.
Both remortgages and secured loans have much lower rates than that of credit cards and with remortgages currently available from less than 2% and secured loans from about 9%, it may seem as if much can be saved not only monetary speaking but also speaking about peace of mind when debt consolidation is put in place.
But if you really think about it, Debt cosolidation is basically taking out another loan to pay of all your other loans. So if you owe $25,000 in total to various creditors, you would borrow $25,000 from a single lender, clear the balance with the previous lenders and pay one monthly payment to your new creditor.
Sounds good, because you are now only paying one monthly sum which is often much lower than all your previous outgoings. But when you add three more things into the equation you soon realise that this is just further increasing your financial woes.
Factor 1 - Most reconsolidation loans are over a longer period of time than the original loans. Most range from 10 - 25 years. So you are paying back less a month over a much longer time frame.
Factor 2 - If the total of all your original debts were $25,000 and you consolidated that amount you would now owe $25,000 plus interest. An example of $25,000 @5 interest over 25 years is approximately $31250 in interest plus the original $25,000 on top equals a staggering $56250 of debt to repayed.
Factor 3 - Refinancing or Debt consolidation is basically giving more debt to someone who is in debt already, like giving heroin to a heroin addict who is trying to get off the drug, or nicotine to someone who is trying to stop smoking. They Basically reignite the problem!
The only way to really get out of debt is by changing your fundamental values when it comes to money. Don't think about borrowing your way out off debt, think about creating your own wealth and getting out of debt by earning more or starting your own business. I have been in the same boat and it is easy to be scared into thinking that you will never get out of debt.
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Written by Jay stamford, site manager of Get Rid Of Spyware and antispyware software i
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