Mistake 2: Consolidate then Splurge
Mistake #2 is considerably worse than the one prior because you actively contribute (to the detriment) of your debts. Again, this stems from the idea that debt consolidation schemes magically hold off your debts for indeterminate amounts of time, or even eliminate them completely.
The leeway afforded to you by a debt consolidation plan should be used for working towards cutting down the debts, not adding to them.
You can hardly call a spending spree ‘cutting down,’ especially when you’re in so much debt already. This pattern of getting yourself into more debt right after promising to pay off your previous ones will, in the long and short run, work to the detriment of your budget, your finances and your credit rating.
Zulika van Heerden provides valuable information on her site on how to live a debt free life.
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