This morning I saw the headline - "Debt Consoildation - Save Money Every Month."  In the article they made this statement "By consolidating their debts, some people are also able to save money."  Now that statement is a much truer statement. SOME PEOPLE can save money.

This "saving money" phrase is a topic I often debate with those facing financial problems.

When someone "saves money" I interpret the phrase to mean they have taken the money and put it away in a savings account or invested the difference.

For example, let's assume all your consumer debt totals $1900 per month. Through a debt consolidation loan all the bills are consolidated into a lower payment with a lower overall interest rate to $1300 per month. This would reduce your  monthly money outflow by $600.

However, if the $600 does not go into savings, investing or paying down the consolidation loan and is only spent - No Money is Saved!

You must focus on debt reduction and not consolidating debt to lower the payment.

The save holds true for items on sale. If you plan on something costing $40 and you can purchase it for $32 the $8 "saving" needs to be saved. This again is where budgets play a major part in everyday money management.