Leading up to Christmas 2012, there was a great deal of news about the fiscal cliff the United States was facing and how these two guys in the picture let it go right up to the last minute until one of them blinked. Fortunately for the president, the other side blinked and they extended the debt ceiling until the end of March 2013. Now we get to go through this all over again while the politicians play politics with each other. But what about your own personal fiscal cliff?
Unfortunately many people are facing their own personal fiscal cliff, but they do not have the solutions that the president has. They cannot print more money and they cannot always raise their debt ceiling. Bankers and lenders who decide if they are going to lend you money can decide not to or they can just increase the interest rate they are charging for the loans that you may need. A personal fiscal cliff can happen any time and all that is needed is some unexpected expense and suddenly you are facing a credit crunch. For many people, unexpected expenses will be medical bills or major damage to their homes from storms.
The personal fiscal cliff is very real for many people. A combination of mortgage on the home, personal loans for the car or other items and their credit cards may be close to be max’d out generating high levels of interest payments. This is probably the worst situation to be in for many people who have not balanced their own budget and have not matched their income with the monthly payments they have. This is their personal fiscal cliff and it is quite scary if you cannot make your payments and facing foreclosure or are having debt collectors calling you all of the time.
Don’t be like the president and run it down to the wire or the last minute. You do not have the leverage he has and the results can be catastrophic on a very personal level. Talk to your banker or lender, consolidate your debt and put a plan in place to repay your debts as quickly as possible to avoid falling over your own personal fiscal cliff.
Consolidation of credit cards for example can reduce your monthly payments and significantly reduce the interest you are going to pay. This approach will free up cash flow you can use to reduce your remaining debt and make a huge difference to your debt situation as well as maintaining or improving your credit rating. Talk with financial managers, talk with lenders and seek help to resolve your situation. Doing nothing about your looming fiscal cliff is really not an option for most consumers.
Take control of your situation and reduce the overall cost of the money that you owe. It is money in your pocket if you can reduce the total amount that you owe.