Living Advice
Question: Okay, I’ve had to face the reality that I am broke. No only broke, but really really broke. So, it’s time for some serious action and I’m looking for some advice. So far I’ve:
Cut up all but one credit card.
Sold my motorcycle (that one hurt) – craiglist
Sold my ex-fiance’s engagement ring – craigslist
Divested myself of my timeshare – timesharerelief.com
And I know this sounds horrible, but I’m thinking of getting rid of my dog. Dogs are expensive. She’s a collie mix and eats a lot. My cousin has offered to take her, but he’s out of state. Should a man have to give up his bike and his dog in the same month?
Anyway, what else do people suggest? Should I get a home equity loan to pay off my credit cards? That sounds practical, but someone just told me that they read an article saying that was bad. Why? Any thoughts? Any other suggestions?
Answer: I’m an animal lover myself, and I say if you can manage emotionally to give her up, it’s probably a financially wise decision, especially since you have a trusted (I assume) relative where you won’t have to worry about what kind of home she’s going to. I bet there’s a way to have her transported there, even if you have to pay someone to. Is your employment situation stable? If so, AND if you have a substantial amount of high-interest credit card debt AND you can get a much lower interest rate on the home equity loan, I think it’s something you should consider. In your situation, this strategy is often recommended against for two reasons that I know of. First, you’re putting a second mortgage on your home, increasing your chances of losing it if you can’t pay both the first and second mortages. Second, unless something has happened to drastically change your spending habits, you run the risk of just running up the credit card balances again.
The most general piece of advice I can give you is to distinguish needs from wants. If you have to dig yourself out of debt, you might have to reduce spending on non-essentials to very little for a while. Don’t eliminate that stuff altogether, or you’ll probably become miserable. Just make the treats cheap ones.
Without knowing what you spend money on, it’s hard to offer specifics. For example, though, if you’re having money problems you can start with doing things like replacing Starbucks with grocery store coffee you brew at home yourself. Packing lunch to work. Cutting way back on dinners out. Finding decent quality clothes on sale or used. Combining errands to save on gas. Just start thinking about the impact of every financial decision you make, however small. It adds up.
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Filed under: Home Equity Loan
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