My brand new $40,000 HEL at 7.5% covers -mortgage debt - $28,000cc debt - $6,000car purchase, cash to fix car purchased if necessary - $4,000property tax due at end of year, since it's no longer included in mortgage payment - $1,000minor spending spree - $500First payment of $475 on HEL due Sept 5.Monthly take home runs $1,700.Plan is to stash $200-$300/month in savings account. I know this is doable, because I have been spending $700-$800 on mortgage plus cc debt. This way I get to earn a little interest instead of paying a lot of it.Coincidentally with paying off the mortgage at 10.75% and the high-interest cc's, one at 27% and one at 25% (yikes), I got a CapOne at 14.9%, so I'm covered there if I absolutely need it, but I haven't been using my cc's except for occasional online/catalog purchases immediately paid off for the last 18 months, and I DON'T PLAN TO START USING CC FOR ANYTHING ELSE EVER AGAIN. (The $6,000 is down from $9,000 two years ago.)I have become addicted to this board in two short weeks, I am in awe of your honesty with each other on a very sensitive subject, the advice and perspective is priceless, and I am also in awe of the determination so many of you show.
Welcome to our wacky world. I'm glad you like it.Just a question.... What's the point of the "minor spending spree?" You just have to repay the money starting in September. How is that any different than spending friviously on a credit card? Is there something you NEED to make your life a happy one? Is there something you don't already have that you're willing to slow down all your debt elimination progress for?Glad to have you aboard,xtn
Hi and welcome to the board!I know yousaid you enjoy the honesty on this board...so please remember that when you start getting flamed for taking out a HEL to help pay off consumer credit. :P
I know yousaid you enjoy the honesty on this board...so please remember that when you start getting flamed for taking out a HEL to help pay off consumer credit. :P I don't think they'll get flamed too much; the poster seems to grasp the concept that using a HEL to pay off debt only works if you stop acquiring more debt (using the credit cards and not paying them off every month).
I find that if I don't loosen the reins a little on occasion, I flip out and blow it big time.So I keep a running list of things that I could really use and when they've been on the list long enough, and haven't popped up in a secondhand store somewhere, then I go ahead.In this case, that means -replacing the ten-year-old futon on my futon couchbuying a year's worth of bras on sale at Nordstrom's (the size I wear, the expensive ones *really do* make a difference, and the special-order model I like retails at $50, so buying 4 or 5 at Nordstrom's annual sale at $30 each makes sense)replacing some particle board shelves in my kitchen with real kitchen cabinetsThese are things I would buy eventually anyway, and splurging on them now helps me keep my mitts off the stash in the bank -for instance, I *am not* replacing my ten-year old computer, I *am not* using my $2,000 car budget as a down payment on a later model car (my current ride is an 84 pickup with 230,000 miles on the original engine, I'm looking to upgrade to a 1990 rather than 1995), I *am not* replacing any of the thirty-year-old carpeting in my house, I *am not* having a deck put in, I *am not* having a driveway poured, etc.
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