Posts by jsangl
How Much Will College Cost?
I read CNN Money's personal finance website everyday. I saw THIS GREAT TOOL, and thought I would share it with you.
The tool is called the "College Cost Finder". Just type in the college you are interested in, and it will tell you how much it currently costs to attend it.
If you have kids, feel free to shudder with cold chills for awhile. Then go to the TOOLS section and use the investment value calculator to figure out how much money you need to save every month so you will be ready to pay cash!
Home Equity Loan To Pay Off Debt?
One of the most common questions I am asked is:
"Should I get a home equity loan to pay off all of my non-house debt?"
Here is my response.
I am not a big fan of consolidating one's non-house debt into a home equity loan. This is for several reasons, and I have outlined those reasons below.
- This is addressing a symptom, not the root cause. This question is usually motivated by our need for immediate action. It is the same motivation that causes us to purchase a car and finance it for five years.
- Borrowing from home equity makes it more difficult to sell the house. This is especially true in today's house market. There are a ton of people who now owe more on their house than it can be sold for. Consequently, they become trapped in the house.
- Changing spending behavior is a process. If one runs out and consolidates their debts, it might remove the urgency from the need to change spending behavior. Changing one's spending behavior takes time. I am convinced that if I had obtained a home equity debt consolidation loan in December 2002, I would not have changed my spending behavior. However, because it took fourteen months to address our debt, our spending behavior was completely changed. We have never looked back!
Having spoken with thousands of people and working one-on-one with nearly one thousand people in the past two years, I am convinced that obtaining a home equity loan is not the best way to eliminate debt. The most common result from obtaining a home equity loan is less equity in the house and the consumer debt shows back up because the spending behavior was not changed.
This is, in fact, my own story. I obtained a debt consolidation loan to move a pile of credit card and consumer debt to one payment. After paying $315.60 a month for an eternity, I wanted to celebrate, but I could not. Why? Because while I had finally paid off the debt consolidation loan, I had not changed my spending behavior and my credit card debt had grown back to more than I had consolidated in the first place!
What do you think?
Related Tools/Articles
Marching To Debt Freedom – Couple #1 – Month 14
Introduction
Couple #1 is THROUGH with debt! They have been married for many years and have two children. They are now over a year into their Debt Freedom March.
Couple #1's Thoughts This Month
It was a good month. We are upping the payment on the HELOC and are close to paying off car 2. With the financial world blowing up around us, it is such a great feeling not to have to make payments on all of that debt!
Updated Debt Freedom Date
Month By Month Progress
Sangl Says …
Couple #1 is making huge strides toward debt freedom. It takes time, but it is awesome to see the progress being made!
Readers …
How is your Debt Freedom March progressing? You can get started on your own Debt Freedom March HERE.
Read Previous Monthly Updates For Couple #1 HERE
Marching To Debt Freedom – Couple #3 – Month 11
Introduction
This couple has been married for many years and have one child. They have HAD IT with their debt and have been marching toward debt freedom since November 2007. They are THROUGH with credit cards.
Thoughts from Couple #3 this month
It is nice to see our balances decreasing as well as our years 'til Debt Freedom! It seems like it will take forever, but we will get there. It is also nice to see gas prices coming down.
Updated Debt Freedom Date
Month By Month Progress
Sangl Says
Couple #3 is closing in on one full year of attacking their debt. It was a rough start since the interest they were paying toward debt was very high. They restructured their debt by surfing their debt to low and zero percent balance transfer credit cards. Now, the pay-off is here! They are averaging around $1,600 of debt elimination each month.
Yes, they could spend that $1,600/month elsewhere, but they have had their IHHE Moment. They have reduced their debt by over $10,000! Outstanding!
Readers
Have you started your March To Debt Freedom? You CAN do it!
Read previous updates from Couple #3 HERE
Budget Booster – Swagbucks
I am a big fan of receiving money for doing something that I already do, and that is why I am pumped about Swagbucks.
Let me tell about Swagbucks. It is a search engine that you use to find stuff on the internet. By signing up for and using Swagbucks for your internet searches, you can earn Swagbucks – a currency that can be converted into rewards ranging from five dollars to hundreds of dollars.
A single Swagbuck has a value of around $0.08, but it can add up! At the rate I have been earning Swagbucks, I believe that I will be able to obtain a $50 gift card every three months or so.
Based on what I have seen, Swagbucks returns the same results as Google.com but pays you to use it!
You can register for your own Swagbucks account HERE.
Find dozens more budget boosting ideas on the Next Steps site.