If your finances are at the brink the first thing you’ll do is be to make a drastic move. You can freeze your credit cards in the form of a block of ice. Promise to never dine out for dinner again. Forgo your Netflix subscription.

These methods can help however, financial experts suggest that getting rid of debt will require a more thorough strategy. A common approach can be debt consolidating, that is combining several debts into one credit or loan with the lower rate of interest, ConsolidationNow provides a debt help.

“Consolidating the debt into one location can be motivating and beneficial from a psychological perspective because it’s like something that is manageable,” says Mathew Isaac Associate Professor of Marketing in the Seattle University’s Albers School of Business and Economics.

But it isn’t the best solution for everyone.

Consolidation is a good option for high-interest loans like credit cards. Households with the debt of credit cards had a total of $6,849 and costing an average of $1,162 annual interest, as per a study from 2019.

Individuals whose income and expenses aren’t enough to address debt issues with credit counseling or consolidation, may want to consider bankruptcy, suggests John Rao, an attorney at the National Consumer Law Center.

Consolidating your debt is just the beginning of an extensive process. Here are the four steps to make it happen.

Create a realistic budget

“In the event that consolidation is to function effectively there must be a clearly defined strategy,” Isaac says.

A standard budget provides money for debt repayment as well as an emergency fund, and retirement savings contributions however, it’s not enough to make it a good consolidation, says Lara Lamb, a certified financial planner with the California Abacus Wealth Partners. Abacus Wealth Partners.

Successful budgeters stay clear of spending more by accounting for the infrequent costs like fees for registration of cars as well as the periods of the year where expenses are high, such as the time of the year when holiday spending is high, Lamb says.

They also allow for enjoyment.

“People tend to go on a spending “diet” and then think they’ve stayed in check for too long and spend money and go out,” Lamb says. “A sensible budget allows you the money to buy things that you appreciate and are passionate about.”

Quit using your cards

The most important rule for consolidation is to not use your credit cards when you pay off your debt.

The majority of people cut their credit cards, put them in a safe or store the cards in ice, techniques which may seem extreme, however experts believe they can be efficient. These tactics are referred to as “commitment devices” and can help people reach the long-term objectives, says Rebecca Rouse, director of the Financial Inclusion Program at Innovations for Poverty Action A non-profit organization that has conducted research on the repayment of debt.

To remain committed Write down the reasons why you’d like to be debt-free and the frequency you’ll pay your bills, and set regular reminders to monitor your performance, Rouse says.

The act of locking away your cards does not necessarily mean you have to close your accounts which can harm your credit score. One exception to the rule of no-use is a minimal charge on your credit card every couple of months, that is paid in full and on time to keep your account in good standing and your credit standing according to Shawn Tydlaska, a certified financial planner with the California Ballast Point Financial Planning. Ballast Point Financial Planning.

Compare products from consolidation

Balance transfer cards allow you to transfer debts to other cards and do not charge charges for a certain period The most effective ones allow between 15 and 21 months then a double-digit rate of interest rate begins. Many cards charge balance transfer charges and require high credit scores and high incomes to be able to get.

To increase your chances of being accepted to increase your chances of getting one, you should add all possible sources of income, such as money from your savings account as well as your 401(k) -and include that amount when you apply, but not only your earnings, Tydlaska says.

The majority of debt consolidation loans offer lower rates of interest than credit cards and you are able to take out more loans. Rates will depend on your credit history and the amount of debt you’re carrying. A lender who sends cash directly to your creditors will eliminate the incentive to spend the cash instead of paying off the balance of debt. There are only a few lenders, such as Wells Fargo.

Find support for your mission

It can feel like something to be ashamed of however peer support can be an effective motivator that can make people accountable, according to Isaac Rouse and Isaac Rouse.

Debt support forums, online groups or a trusted family member can help keep you in the right direction to achieve your goals. Even online lenders like Prosper and Payoff provide tailored advice or applications to help borrowers.