Debt consolidation is pointless. Here’s why.

Debt consolidation doesn't work

I know this may seem obvious, but I think so many people are stuck thinking in the “payments” mindset. Here’s a list of stuff that will NOT get you out of debt:⁣

• Debt consolidation⁣
• Refinancing⁣
• Loan deferment⁣
• Lower interest rate⁣

All that stuff is just pushing peas around the plate. It makes you feel good because it feels like doing something, but it’s not. If you owe 40 grand, you gotta pay 40 grand. Changing the payment, rate, number of loans, etc. ain’t gonna make that 40 grand go away. The way to make it go away? You gotta eat your peas. Give them 40 grand. And the more you play those games, the more you’re focusing on the wrong thing. That may mean you’re in debt longer and missing out on a huge opportunity to build wealth.⁣

So when people ask me if they should consolidate, refinance, defer, etc. I remind them that it’s important to stop focusing on the payment and focus on the total amount. And create a plan and go HAM on it to get that to zero. If you’re doing that and consolidating will save you a few hundred bucks, for a few hours of your time? Sure, why not. But don’t fall for the illusion that you made progress by doing that. Remember the only way to actually get rid of the debt: pay it off.⁣

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.⁣

– Jeremy⁣

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