Most people who struggle with debt have more than one creditor to deal with, and possessing 4, 5 or 6+ credit cards is not uncommon for the average household in the western world.

The main advantage of getting a debt consolidation loan to pay off all your personal credit cards debt, is that the Annual Percentage Rate (APR) of a typical consolidation loan will be lower than the APR of your credit cards. If you do the math, you’ll notice that this can save you quite a bit of money in the long run and allow you to pay off your debt faster than you would be able to do otherwise. On top of that, you’ll only have to pay one creditor, instead of needing to deal with several bills, different due dates, minimums and so on each month. If you’re able to get a fixed rate term loan, you’re also guaranteed that the interest rate won’t increase over time – something that credit card companies are not usually able to promise you.

On paper it seems like a great plan: cheaper, faster and convenient. There are however a few hitches to keep in mind before going ahead with this plan of (debt) attack. The first issue concerns the lending institution where you get such a loan from. If your credit is excellent and the amount of debt that you have is relatively small, you can probably obtain a simple personal loan, which won’t affect your credit score too much. In most cases though, if you are heavily in debt, chances are that your credit score is not that great to begin with. If you apply for personal loans which in turn get rejected, you credit will be affected negatively, making your financial situation slightly worse off than it already is.

You may be able to obtain a loan for the specific purpose of debt consolidation by talking directly to your credit union or banking institution, or by first seeking debt counseling with any one of the many non-profit companies who specialize in this field. There are two inconvenient aspects however, if you opt to go this route though. Firstly, in most cases you will have to provide a co-signer or some form of substantial collateral such a car, as well as a budget that’s outlined to the last penny and which shows that you are able to handle the monthly payments. Secondly, and perhaps more importantly, a debt consolidation loan is a glaring red flag in your credit history. Taking out such a loan is not a decision which you should rush into lightly, it truly affects your credit and is best viewed as being something of a “last resort” option.

Perhaps the biggest problem with debt consolidation loans has to do with the psychology of the debtor (the person who is carrying the debt load). While such is not always the case, some people who are in debt are there due to poor impulse control and spending habits. What do you think it’s going to happen when the credit cards are freed (thanks to the consolidation loan) once again? You guessed it, many people end up accumulating further debt, because they haven’t broken free from their addiction to buying on credit yet.

These are all important aspects to keep in mind before proceeding to apply for a loan. There are times where debt consolidation is the only solution, short of filing for bankruptcy. Only you know your own personal financial situation well enough to be able to judge if this is the case. In many situations however, applying the debt-avalanche method, sticking with the goal of paying off your balances, and the determination not to rebound into consumer debt is what it takes to become debt free.

Photo credit: Lotus Head.

We are taught to follow the rules, which is usually wise advice, especially when the consequences of not doing so can be quite serious. There are times however when going against the rules is the best thing that you can do. The Milgram Experiment comes to mind, but in every day life there are many choices that are influenced by whether we blindly follow the rules or we apply some common sense and “human touch” to them.

An incredible example of someone thinking, “screw the rules” is Dr. Malcolm Coulthard. BBC has an article that reports on how he and a nurse, Jean Crosier, saved the day by going against the rules and acting, not just thinking, outside of the box. A baby, Millie Kelly, experienced kidney failure during surgery. Her 6lb body was too small for the conventional dialysis machine so doctors informed the mother that the child was unlikely to survive.

This amazing doctor decided to create a scaled down version of the dialysis machine in his garage. According to the mother of the baby, the result was less than standard looking, “It was a green metal box with a few paint marks on it with quite a few wires coming out of it into my daughter”. This home-made machine saved Millie’s life and she is now a happy, healthy 2 year old. The machine is still in use at that hospital, saving the lives of many babies who are too tiny for conventional machines.

Doctor Coulthard is now asking that a proper, official version be created and distributed in order to save many lives that are needlessly lost. I found this story to be touching and I wanted to share it with you, to remind us of how we can all be heroes by simply going beyond the rules when something more important is at stake.

Are you ready to ignore the rules?

Zen and the Art of the Internet is an old guide for beginners written back in 1992. In the preface contains this pearl:

One warning is perhaps in order—-this territory we are entering can become a fantastic time-sink. Hours can slip by, people can come and go, and you’ll be locked into Cyberspace. Remember to do your work!

That really hits home, doesn’t it? More than fifteen years later we’re fully immersed in the information age and those prophetic words have never been truer. We are overloaded with information, so much so that it becomes distracting, harms our ability to select and digest knowledge that matters the most, and ends up killing our focus and productivity.

Humans are not multitasking machines, because there really wasn’t a strong evolutionary reason for us to be. We perform better when focusing on a single task, it’s hard-wired in our individual brains, and the context switching required to jump from one task to another is far too “expensive” for our minds to continually deal with.

The solution is to put yourself on an information diet. These are a few strategies that can really help to limit your daily information intake, simplify your life and get things done.

1. Limit recreational Internet surfing

Sites like StumbleUpon, Digg, Reddit, Facebook and Twitter can be fun, interesting, informative and even teach you many useful things, but they are time-sinks. If you aren’t careful, several hours of your personal time can end up being wasted, when perhaps you’d like to put them to better use. Decide what the amount of time is that you’d like to spend on such sites, and stick to it. One hour of your personal time is usually a generous compromise. Remember that you can use RescueTime or similar tools to keep track of how much time you spend browsing and using certain applications.

2. Syndication is your friend

There are information sources that truly matter to you and rightfully, that’s fair, we each have our favorite areas of interest. Rather than checking them regularly and getting lost in the Internet in the process, use a good RSS feed reader. It will make your life much easier, allow you to follow the type of content that you really need or want to read more closely, and prevent you from jumping from site to site in boredom. Read your feeds once or twice a day, and then get on with your life.

If you are using a Mac OS X I suggest the excellent NetNewsWire, while Windows users should take a look at FeedDemon. If you prefer to use your browser, as opposed to a standalone desktop application, Google Reader is definitely worth a try.

If you already use a feed reader, don’t forget to put it on a diet as well. Do you really have time to read hundreds of regularly updated feeds?

3. Don’t obsess over your email

Check your email inbox two (or three times maximum) during the day. Some people tend to frenetically hit “refresh” while waiting for new emails to show up or they check every email notification that appears in programs like Outlook, Lotus Notes or Thunderbird. Unless you work in customer service relations, disable pop up notifications, blip sounds, and only check your email every few hours. You can read Inbox Zen with the three folder email system to learn more about a good system I use to stay on top of emails without stressing over them.

4. Limit IM chats

Instant Messaging is a very immediate form of communication and it’s rapidly taking over the use of emails, even in the workplace. My suggestion is to limit its usage though, because you can easily end up wasting both yours and other people’s time. The easiest way to accomplish this is to put yourself in “Do not disturb” mode. If it’s truly an emergency, you’ll get contacted regardless of your status. But you’ll also avoid all those “So what’s up, Tony?” type of chats. Note that I’m not advocating getting rid of social interaction. On the contrary, I’m suggesting more social interaction when appropriate (in the form of taking to someone in person). Most people will agree though that being interrupted by IM messages when you are in the middle of working on something brain-intensive is a surefire way to lose focus.

5. Skip unnecessary meetings

There are meetings you don’t really need to participate in. So why are you still going? If your presence at a given meeting doesn’t benefit either yourself or your company, I’d argue that your time is much better spent on actual work. Of course, I’m not advocating that you stop attending meetings all of a sudden, that’s a good way to get fired. Rather I’m suggesting that you discuss with your manager about whether or not your participation in a meeting is required and of any actual advantage to the company. Meetings can be very useful, but let’s be frank, many of them aren’t.

6. Keep it short on the phone

Don’t chit-chat on the phone. Get to the point quickly and politely and always encourage the person on the other side to skip ahead to the real reason behind their call. If a follow up is required, try to see if this can be arranged by email instead.

7. Cut the number of hours in front of the TV

Try to limit the amount of time that you spend watching TV. If you read the news online, you don’t really need to view it again in the living room. I don’t dislike TV, there are a few interesting programs that I feel are really worth watching, but if you’re not careful, TV can become a big source of information overload and equate to time spent in a less than productive manner.

Some people watch 4 hours of TV a day. Is that too much? Too little? I like to think in terms of percentage of one’s over-all life. On average, we have 16 waking hours a day. If you consistently spend 4 hours watching TV every day, then TV ends up “wasting” a quarter of your adult life. Is it a waste? It depends, on your deathbed would you regret having spent a quarter of your life watching TV? I know I would.

Enjoy your free time

These 7 tips for reducing the information overload outlined above are a mix of things that can be applied to your personal and professional life. They’re not intend to be a guide for making you a productive, unstoppable machine. Productivity and focus at work are the main effects of these techniques, but there is more to them than that.

What would you do if you had 16 extra hours a week that could be obtained by eliminating unnecessary, time-sink types of activities? You could hang out more with the people you care about, take up a hobby, get a dog, go out more or work towards your goals. Regardless of how you choose to spend your newly obtained time, your life will likely be much better off because of it.