Definitely some good tips here! Although, I don’t quite get the “be your own bank” one. How do you lend money to yourself? Does she charge herself interest? Where does the money come from?
That being said, if you have a HELOC, boom! You are your own bank! New car? Write a check for it! Investing opportunity? Bam. Check. Vacation? Easy, write a check!
But to qualify for a HELOC, you’ve got to have several things in order. And you have to demonstrate financial capacity.
- You need a home
- You need equity in the home
- You need a HELOC
- You need to be smart!
Dave Ramsey shies away from HELOCs. He calls them Hell Locks. It’s an easy way to get into debt. Yes, true. If you are only using your HELOC to spend more money, they are dangerous. But like this frugal mom says — be your own bank! And be smart. Don’t use a HELOC to spend money. And hopefully by the time you have a nice HELOC, you will have asked yourself a thousand times: Is this $1 worth $5?
