You Can Not Borrow Your Way Out Of Debt

I have seen so many people attempt to borrow their way out of debt.  I have personally tried to borrow my way out of debt.  The problem is that it does not work!

Here are some ways I see people try to borrow their way out of debt:

  • Debt Consolidation Loan  Roll all of the credit cards into a single loan.
  • Home Equity Loan  Roll all of the credit cards and car payments into a single loan using home equity.
  • Loan From The Parents  Roll all of the debt into a single loan from Mom and Dad.

I have never seen it work because these "solutions" only address symptoms!  You must address the root cause of what created the debt in the first place.

Iit is necessary to change spending behavior and money management behavior. 

I have seen a lot of people use the crutch of "it is medical bills" and expect to receive a free pass on the debt.  That is so frustrating because in nearly all cases, the reason the medical bills exist is because the individual or family opted out of carrying health insurance.

I have seen a lot of people use the crutch of "I lost my job" and expect a response of "Oh, that makes your debt OK."  BUT it would have never happened if they would have made an emergency fund of three to six months of expenses their top priority instead of a house, cars, furniture, and numerous other "gotta-have-it" purchases.

You simply can not borrow your way out of debt.  It requires a written plan and a ton of focus.  You can start your journey by reading THIS SERIES and preparing your own written spending plan using the FREE TOOLS

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7 Responses to “You Can Not Borrow Your Way Out Of Debt”

  1. Cyn February 11, 2009 at 11:02 am #

    Pre-Planning is like Pre-Paid Legal. This one really speaks to me. I hope everyone is paying attention and I wish I had read this about 5 years ago when I got an equity loan on my home that was paid off at the time, what a fool, but I am learning. Thank you!

  2. Travis February 11, 2009 at 11:31 am #

    Joe….

    I couldn’t agree more!

    Before we took control of our financial life, we had done 2 of the 3. …and would have done the 3rd if your parents had any money…

    Now 5 years later….Debt free but the house!! Life is good and getting better.

    Everyone reading this… You can do it too!!

  3. MLemus February 21, 2009 at 2:11 pm #

    Great Post, this stuff really is the next wave of the future.

  4. Grace March 4, 2009 at 10:54 pm #

    Hello to all :) I can’t understand how to add your site in my rss reader. Help me, please

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