Is Debt Consolidation a Bad Thing?

Reader Question: Why do you think debt consolidation is such a bad thing?

dave_ramsey Debt consolidation is a bad thing because it makes you feel like you really did something to get out of debt and change your financial world when you didn’t. People come to me all the time saying stuff like, “Dave, I got a second mortgage. I paid off all my debt!” Well, no you didn’t pay off all your debt. You just moved it around.

That’s part of the catch when it comes to debt consolidation. If you get a lower payment and move things around a little bit, you feel like you actually accomplished something. The problem with that is you don’t do anything to address the real problem, which is you.

Interest rates aren’t your problem, and the number of payments isn’t your problem. Your problem is the person you look at in the mirror every morning. Until you fix that person and get mad enough at your financial situation and the real cause of it, you’ll never make any progress toward getting control of your finances.

Trying to borrow your way out of debt is not a good plan!

Dave Ramsey

Dave is the author of The New York Times best-selling book Financial Peace. He is also the host of the nationally syndicated The Dave Ramsey Show, and is a regular guest on television. All of his financial counseling is based on biblical truths. You can hear Dave from 9 a.m. to 11 a.m., weekdays, on WLWI 1440 AM or online at www.daveramsey.com. Send your questions to askdave@daveramsey.com. He resides with his wife Sharon and their three children, Denise, Rachel, and Daniel, in Nashville, Tennessee.

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