My current financial adviser keeps getting distracted.

You probably have heard the phrase “debt consolidation” before. If you’re like me, the first time you heard it you thought “That’s not for me” or “I will never need that.”

However, we all know times are changing. Lately, the bills just keep coming. I was unemployed for a bit and got behind on a bunch of stuff. Every day I find a different bill in the mailbox. Medical bills, overdue utility bills, car payments and credit card bills pile on top of my cable bill, cell phone bill and rent. There has to be an easier way.

The sooner the better

For the past few months I’ve been struggling. I keep thinking “I’ll get it under control next month.” I know better than to skip credit card payments, so I’ve kept up on those. Meanwhile, bills from other creditors are collecting dust and interest. I know that this will only get worse with time. I have tried the “ignore it and hope it goes away” strategy before. It did NOT end well.

What is debt consolidation?

I know that debt consolidation usually involves getting a personal loan to pay off all of your creditors at once. The slate is wiped clean. Then, instead of paying the hospital, the podiatrist, Visa, Mastercard, a collection agency and Toyota, you just make one payment each month on your debt consolidation loan.

Let’s learn together

I don’t know yet if debt consolidation is right for me. But I am embarking on a journey to find out. If you are questioning whether debt consolidation is right for you, join me. I will find out all the benefits of debt consolidation, the drawbacks, which bills it will cover, the alternatives and how to do it right. Stick with me, kid, we’ll figure it out.

Help in hard times

Welcome back to Part II of this series on “Financial Preservation in 2009,” courtesy of personalmoneystore.com’s payday loans money blog. This series will continue addressing how to prevent financial crisis as a result of unemployment in 2009 by preparing now.

Here are a few things you can do to save extra money today while you still have a job, so that you have the necessary emergency funds you need later this year if you find that you don’t.

Are Those Car Payments Really Necessary?

Nobody can blame you for wanting what is hot or the current trend, but when it comes to automobiles, staying with the current trend can cost you a lot of extra money.

When buying a new car, not only does it require high monthly payments but also higher insurance rates and higher taxes and licensing, delivering one whammy after another to your pocketbook, and needing payday loans to cover for it.

Is this really necessary? Downgrading to a newer used vehicle, or even an older model that has been nicely taken care of and properly maintained, will save you both in monthly payments and taxes and licensing.

You may even be able to trade your current vehicle for an older model that the dealer has gotten on a trade-in. This could get you out of payments altogether.

This should be carefully considered if you are concerned with your job’s longevity as it can save you thousands of dollars which, if saved as emergency funds, could preserve you in a time of financial need.

Downgrading Digital Services

Consumers today are gadget-obsessed, having a multitude of gadgets and digital subscriptions that may be cheap by themselves but add up to a considerable sum when considering other digital services in your home.

These digital services include things such as your cell phone, cable television, digital media, satellite radio or any other of the digital packages available today.

Examine each of the packages you have and decide whether they are used enough to justify what you are currently spending. After your evaluation, you will be able to determine whether to downgrade each respective package or terminate it all altogether.

Debt Consolidation And Payment Insurance

When loosing your job, payday loans are not typically an option due to employment requirements, which means the only funds that will be available to you during this time will be the funds from your unemployment office.

These funds alone will likely not be sufficient to pay your bills, leaving you to pick and choose between which bills you are going to pay and which bills you are not.

Defaulting with creditors wreaks havoc on your personal credit rating. You may have to hire one of the many credit repair services or credit repair companies to help you repair your credit in the event that you do so.

Defaults can take several years to cycle off your credit report, so what you do now will save you both time and money later.

Here are two things you can do now to better position yourself with your outstanding debts so that you won’t be forced to default on any of your current creditors down the road provided you still have them.

Payment Insurance

The first thing you can to is purchase payment insurance through your creditors. Payment insurance will pay your monthly minimum payments in the event that a financial crisis befalls you and you are not able to pay yourself.

The cost of payment insurance varies from one creditor to the next but it is usually a very small sum and is calculated based on the current balance of the account. For example it may be $1 for every $100 dollars of your current account balance.

Debt Consolidation

The second thing you can do is consolidate your debts. Preferably, consolidating your debts into your home mortgage would be the best option if you’re in a position to do so.

With the current interest rates on home loans as low as they are, it may be in your best interest to refinance your debts into your home mortgage.

This allows you to spread that debt over a 30-year term, making the payments far more manageable. You end up spending more in the long run, but it’s a nice safety net to keep you from defaulting with your creditors in the event of limited cash flow.

Lastly, don’t forget about the options we provide you here at personalmoneystore.com. If you find yourself in need of quick cash payday loans to avoid the more spendy late payment fees associated with many of your creditors, we can help. Provided you are still employed, that is.

Good luck in 2009!