Hump Day Help – Set Up a Home Equity Line of Credit
Welcome to the Hump Day Help. Each Wednesday we take one of the weekly actions from Jonathan Clements‘ blog Humble Dollar and “militarize” it for you. Jonathan Clements was a longtime personal finance columnist for The Wall Street Journal, and he offers great advice at the best price you can get…free. Here is this week’s Hump Day Help:
SET UP A HOME EQUITY LINE OF CREDIT. These have lost some of their allure under the 2017 tax law, because you can only deduct the interest if it’s used to buy, build or substantially improve your home. Still, a HELOC is one of the cheaper ways to borrow, and it could come in handy if you have a financial emergency or as an alternative to education and car loans.
You should make it your goal to never borrow money for anything that depreciates or decreases in value. That would include cars. But if you have some home equity and would need to take out a car loan, using a HELOC certainly seems reasonable.
Borrowing is best reserved for things that appreciate or increase in value, like real estate, education, or businesses. Learn how to manage your debt the Military Millions way by reading our guide to managing debt.