Friday, February 29, 2008

The H E L --$39900 worth!

Do you ever wonder why that is the acronym?

Hmmm, well as you can see in my last post I have some spring fever. I would love to do some home improvements...but that's why I have a HEL... I've already done improvements in the past and have used up a bit of my home equity to do it. I reasoned that if I'm improving my home, it's not bad? The problem is that not all of the balance went to home improvements. There is the remainder of a car loan on there (we no longer own the car, I had to pay it off to get the title so that I could sell it. But when I sold it I didn't pay the HEL back). I'm paying interest for a car loan on a car that I don't own anymore. How ridiculous is that? Most of it, however, was put into the house, creating an extra room in the basement, hardwoods in the kitchen, and a couple of other improvements that I can't think of at the moment. But every time I look at the statement, I have a pit in my stomach. I don't remember what I spent all that money on. And that's bothers me the most.

So, I'll start with cleaning and organizing my house first (no cost there). Then I will start a home improvement account and do one room at a time . . .and I'll pay cash all the way...(as long as my emergency account gets paid first :)).


Canadian Saver said...

I love the idea of one room at a time... there are lots of cheap or free things we can do (decluttering, reorganizing) that can make a big difference.

If you attack that debt and vow to pay it off asap, I'm sure you'll be very successful :-)

CT Mom said...

Hi Sharon - you have the right idea ... we are taking the same approach. Our HEL has the kitchen and bath remodel, some cc payoff and our Disney timeshare. We paid for our siding and windows out of bonuses and savings, and dollar-wise it's a wash (the same amount we put on our HEL is the same amount we paid outright for the other items).

I'm in your camp now - we don't put any improvements on credit unless it's a 0% deal and we can pay it off quickly, or else we pay for it outright from bonus or savings. Last year, we didn't do any major work because my husband's company did poorly and did not give out any bonuses. Our HEL will be paid off in 8 years, and the house in 10 years, and I never want to pull equity out again.

Sharon said...

I'm jealous that you only have 10 years left on your mortgage! That's awesome! We have at least 24 unless we can pay a bit more each month once the hel is paid off.