Biggest Money Mistakes Series – Home Equity vs. Credit Card Debt

“I always turn to the sports pages first, which records people’s accomplishments. The front page has nothing but man’s failures.” – Earl Warren, Former Chief Justice of the United States.

Mistake # 7: Getting a home equity loan to pay off credit card debt is a good idea. No, it’s a terrible idea. The excuse is that you have converted a non-deductible high interest debt to a lower interest tax deductible debt. I mentioned in an earlier post in this series that Converting unsecured debt to one that puts your home at risk if you default is a bad idea.

Solution: Follow the 12 steps in Wealth On Any Income and set aside 10-15% of your income to handle emergency spending. Set aside 10% of your income to create financial freedom. Establish a spending plan based on goals that reflect your values and principals and you will have a spending plan (or budget) that will work for you.

Rennie Gabriel – Rennie@RennieGabriel.com
Author of Wealth on Any Income: 12 Steps to Freedom