The best case scenario is always the hardest, paying off all your debt until you are debt free. For many consumers, reducing debt is out of the question. So many people are too busy paying their regular payments: mortgage, car, phone, cable, water, energy ect., that they forget or just do not want to pay extra on their consumer debt. This is a sore subject for most people because it affects a large number of people. Many just do not want to admit that they are one paycheck away from a financial crisis. Thinking about it, how many people in the United States can afford to miss a paycheck? Can you?
If your answer is No to the questions above then you could have a financial mess on your hands soon. When hurricanes hit, the people who get hurt the most are those living paycheck to paycheck and receive aid through the mail. It may take several days for the U.S. mail to get back into their normal scheduling of distributing mail. This is why direct deposit is such a good idea because everything is done electronically.
So keep looking for ways to reduce consumer debt. Keep making extra payment on your vehicles, credit cards and lastly, your home mortgage.
Some just keep digging deeper and deeper. I had a client on the phone who told me his 1st mortgage was giving him a reverse mortgage and he was going to use it to catch up and maintain the payments on his second mortgage. It makes no sense to me. He got into trouble because of his fixed rate equity loan and now he is going pay it with a home equity line of credit for older people.
Wow Adres, thats crazy that your client is even thinking about doing that. The truth is that folks need to make drastic measure but they dont’. I’m talking no cable, maybe one cell phone, but a paid for minute plan. This is not a forever thing, but anything to help you get ahead, like a part-time job for 6 months you know.