The #1 way to manage your money better
/Learning how to manage your money better is a skill anyone can learn with just a little effort and intention. The #1 way to manage your money better is to consolidate your bills.
Consolidating your bills can seem like a daunting task, but it doesn't have to be. In fact, there are several reasons why you should consider consolidating your bills. But if you're on the fence, here are five situations where it makes the most sense to consolidate your debt.
1.You're maxed out on your credit cards and can't afford to pay them off any longer
If you're maxed out on your cards and can't afford to pay them off anymore, consolidating your bills can help you get closer to being debt-free. Consolidating also enables you to stay on top of your payments and avoid late fees since you'll have fewer credit card bills to manage. The best way to consolidate credit card debt? A 0% balance transfer credit card. If you can tackle the debt before the 0% rate expires, you can save a ton of money in interest.
2. You're considering moving soon and want a better mortgage rate.
If you're considering moving, the cost would be much higher if you had your bills spread out among several different creditors. Consolidating your bills can help you get a lower interest rate on a loan to cover the costs of your move and also make it easier to get pre-approved for a new mortgage.
3. You've recently lost your job or have had to reduce your hours at work
If you've recently lost your job or have had to reduce your hours at work, consolidating your bills can help you avoid late fees and get a lower interest rate on a loan to cover the costs of your unemployment or reduced hours.
4. You have a large amount of debt that you would like to pay off in a short amount of time.
If you have a large amount of debt that you would like to pay off quickly, consolidating your bills can help you save money on interest and reduce the number of payments you have to make. Additionally, consolidating your bills can help ensure that you receive the best possible terms on your debt.
5. You want to improve your credit score quickly.
If you've got a lot of credit card debt and want to improve your credit score quickly, consolidating your bills can help. While you can expect a slight dip in your score because of the credit inquiry when submitting your loan application, inquiries only account for 10% of your overall score. Your credit utilization, however, accounts for 30%, so reducing your utilization will easily make up for the ding caused by a new hard pull.
The bottom line
Consolidating your bills can be a great way to reduce your overall debt and free up money that you can use to pay off other debts or save. However, it's essential to consider all of the factors involved before making any decisions and always consult with a financial professional if you have any questions about consolidating your debt.
