| Debt consolidation loans are a popular way to lower | | | | PLAN stage, you see what items you can eliminate or |
| monthly payments to a comfortable level, but it is | | | | reduce from your budget and focus on cutting out all |
| harder to get these loans than it used to be. Because | | | | unnecessary spending. You may be able to get by |
| home values have decreased, there is less equity to | | | | with less, if the entire household is involved in the |
| borrow for debt consolidation. Loans that were home | | | | planning stage. |
| equity loans or second mortgages were a large | | | | During the ORGANIZE stage, you get ready to |
| source of consolidating debts, but most people have | | | | implement the changes. Even if it looks like you need |
| lost some of the equity they had during recent | | | | debt consolidation to get your monthly budget back on |
| economic times. For this reason, there is an alternative | | | | track, you are going to need to see how much money |
| to get your cash flow under control, called POEM. This | | | | you can afford for a monthly payment. This means |
| is an acronym that stands for PLAN, ORGANIZE, | | | | finding out the balances you owe, determining the |
| EXECUTE and MONITOR, (or the control stage of the | | | | monthly payments you can save through the debt |
| process). | | | | consolidation loans and proving that you are able to |
| This loans are typically used to pay off higher interest | | | | make the payments on time. |
| rates on credit card balances or personal loans that | | | | The EXECUTE stage is time to take action, to get |
| are unsecured. Because of this, most lenders have | | | | your cash flow under control. If you are considering this |
| tightened lending requirements on these unsecured | | | | type of loans, you need to get the ball rolling and find |
| debt consolidation loans or they are requiring collateral | | | | out whether they are an option at all. Otherwise, you |
| to make secured debt consolidation loans. This is fine, if | | | | will need to start saving everything you can, so you |
| you have a car that is paid off or something else of | | | | might want to cut out the cable television, lower the |
| value to borrow against. For more people, this isn't the | | | | cell phone minutes or raise the insurance deductible on |
| case, so the easiest thing to do is use better cash | | | | your car insurance. |
| flow management techniques. That is where POEM | | | | The final stage of MONITOR is tracking your spend |
| can be a helpful tool to give you enough money to pay | | | | and keeping it under control. If you are able to get your |
| the bills and extra money to save for other things. | | | | cash flow under control, you can eliminate the need for |
| During the PLAN stage of poem, you need to decide | | | | debt consolidation loans. Many times, people will turn to |
| where you will make spending cuts. Most people that | | | | debt consolidation loans instead of controlling their |
| are considering debt consolidation are having a hard | | | | spending habits. When this happens, the cycle can |
| time coming up with enough money each month to | | | | start all over again, which makes the POEM technique |
| pay the bills. You need to write down your monthly bills | | | | a better alternative to this type of loans. |
| and decide how much you have left over. During the | | | | |