Comments for Personal Finance Guide

Comment on Use a HELOC as an emergency fund by Provo Insurance Agent

Provo Insurance Agent — Mon, 06 Oct 2008 19:41:21 +0000

This is very risky advice to be giving out on a blog. This idea may work for some people (I’d never recommend it for anyone) but not all. Helocs usually have variable interest rates which can destroy your financial plan overnight. If you need an emergency fund than save up some money for a few months.

Comment on Use a HELOC as an emergency fund by Lisa

Lisa — Wed, 13 Aug 2008 20:44:06 +0000

Doesn’t work if your house value drops….. ahhh…. the market dropped. I don’t think the house I bought two years ago is worth what I paid. Think it dropped at least 10-15%

Comment on Use a HELOC as an emergency fund by Anthony

Anthony — Thu, 20 Mar 2008 19:43:26 +0000

I have to say that is really not good advice at all. Any financial professional will tell you that having an emergency fund is a smart financial move. No (good) financial professional would tell these people to use debt over savings. That is just bad advice, plain and simple.

Perhaps you are confusing the “trend” with people who use money merge accounts to pay down their mortgage instead of having these funds sitting around, then using the HELOC for emergencies, but still the recommendation is always to have an emergency fund because it make more sense to earn interest than to pay it.

Comment on Child Life Insurance by Carin

Carin — Mon, 17 Mar 2008 15:45:42 +0000

Good article!

The life insurance policy that you buy for your child can also be advantageous in later years. The policy is bought when no health concerns are a factor; simply by keeping up the premiums, your child will have coverage that has cash value later on.

Comment on Use a HELOC as an emergency fund by savvy

savvy — Tue, 26 Feb 2008 16:22:30 +0000

Uh, NO. Your emergency fund should NOT be put in ‘high-yield invesments’. It should be kept in ’safe’ accounts such as online savings accounts or MMAs. What if your investments are down when emergency strikes now you have to sell at a loss?

Comment on Use a HELOC as an emergency fund by Jordan

Jordan — Tue, 26 Feb 2008 05:33:11 +0000

To clarify, the difference from the emergency fund should be put in higher yield investments rather than put in cash. If you put your emergency fund in a better yielding account, borrowing when you had an emergency could easily be covered by what you save. In no way am I recommending that you spend the money you would ordinarily save, I’m telling you to save the money you’d save more wisely; get higher returns on it but protect yourself in the mean time.

Comment on Use a HELOC as an emergency fund by Debt Free Revolution

Debt Free Revolution — Mon, 25 Feb 2008 17:42:31 +0000

I’ll second what savvy said. An emergency is NOT a good time to get deeper in debt! An emergency is the time you need to hunker down and batten the hatches, and you often can’t be sure just how long it will last. I’m sure there’s quite a few folks in Michigan who would disagree with this advice as well. Or maybe in California or south Florida or Nevada or Arizona, where the housing bubbles have burst most dramatically.

In fact, just what is your advice for people who suddenly find themselves upside down in their mortgage when housing prices for their area tank?

Comment on Use a HELOC as an emergency fund by savvy

savvy — Mon, 25 Feb 2008 04:12:53 +0000

I wouldn’t count on a HELOC for an emergency fund. As of late, banks are reducing the amount of HELOC credit available on existing accounts. It would be a sticky situation if you lost your job without having much liquid savings then found your HELOC reduced as well. IMHO, people should get away from relying on credit and concentrate on saving.

Comment on Using Cash Advances Properly by Affordable Payday Loans

Affordable Payday Loans — Thu, 06 Sep 2007 01:49:20 +0000

APR does hurt the annual loan payer, essentially these payday loans are built around to give fast cash but then the interest rates simply rip you off.

Emf’s comment holds value

Comment on Using Cash Advances Properly by EMF

EMF — Sun, 05 Aug 2007 16:06:56 +0000

The only thing great about these loans is the interest rate — great for the lender, not the borrower. If you have to pay 10% of your loan in fees to borrow it for a couple of weeks, then effectively you’re paying an APR of 260% which is even higher when compounded.

What do they charge? Don’t know myself, I’ve never have been taken advantage of by one of these loans. And this article won’t tell you, nor does the linked site.

Do anything you can, eat Ramen for a couple of weeks in necessary, to avoid payday loans.