A friend of mine had a tattoo on her forearm that, after a while, she grew to dislike. She decided to see a tattoo artist and have that artist (evidently a renowned artist) see what could be done with the tattoo. It was decided to cover up the first tattoo with another tattoo that might be more aesthetically appealing. What does this have to do with debt consolidation?
The artist did his magic, and now a simple line drawing of an amphibian has morphed into an elaborate, colourful collage with an interesting phrase. The replacement is about 300% larger than the original tattoo’s surface area. I hope my friend enjoys the “cover-up” tattoo. It got me thinking that this seems much like the constant refinancing and blending of debt (into other debt vehicles) that many folks seem to be doing these days. Still no explanation on this debt consolidation angle?
Covering up debt is not making debt go away. In contrast, debt consolidation loans can make it convenient to have most of your debt in one place. If you continue to live the lifestyle that got you into debt in the first place, you are only making the debt bigger (much like the tattoo).
If you use a Debt Consolidation loan to get control of your debts, make sure you have a solid plan to pay down the debt. Make sure that you do not grow the debt further. Debt Consolidation loans are simply a tool. They are not a cure. As with all tools, you can make a mess if you are not using them correctly.
It is also a last-resort tool. It would be best not to consolidate debt every couple of years.
Debt Consolidation Loans?
Mrs. C8j has pointed out that more than a few advertisements for debt consolidation loans imply that once you get the loan, you are “Out of Debt”, but your debt has not changed it is just all in one place. You are out of debt when it is paid off.
Another good point with the tattoo metaphor is that at least my friend went to a professional to get the “touch-up” tattoo (and didn’t rely on a friend of a friend who did these for fun). See a professional bankruptcy trustee if you are considering a consolidation loan. They may have some other ideas that could help out.
Remember, there is no such thing as good debt.
My list of debt commentary articles is quite long, so let’s stick with the basics.
- Three Solid Ideas For Your HeLOC is a misdirection title. With interest rates going up, home equity lines of credit are becoming heavier anchors on your financial life.
- Pay Day Loans? Absolutely, positively NO! Go talk to a licensed insolvency professional before you do this.
- Surreal Paragraphs Found in Credit Card Bills, if you carry balances on your credit cards, you are in trouble. Look at their estimate for how long it will take to pay off the debt on minimum payments.
- A Mortgage Changes You, which is very accurate. When you get a mortgage, your life changes, and it will be a major element of your financial decision-making process.
- Make More by Reducing Debt with some elementary (maybe naive) arithmetic.
- Straight Talk on Your Money is not just a good book (and podcast). It explains how debt can get out of control quickly.
- Debt-shaming: Debt is Bad, but You Aren’t having a poke at the “influencers” who say my commentaries about Debt being BAD is debt shaming.
- My coup de grace There is No Such Thing as good debt. Debt is a tool, like a chainsaw, and must be respected.
Managing tattoos (altering) and managing debt are not quite the same. If you do it right, debt would/should eventually disappear hopefully with no lasting traces.
As to tattoos, IMHO, the parchment they are written on today will not resemble at all the parchment in 30/40 years from now. I sometimes wonder if those birds flying in the bright blue sky will encounter cloudy weather in the future with all the ripples and curves in those clouds.
RICARDO
However, a well placed arrows showing directions to stow equipment might always be handy some time in the future if I need glasses or get alzheimers and forget where to put it. Again, IMHO
Maybe I should have said, “Tattoo Coverups CAN be like Debt Consolidation”