Reader Question: What If You Lead a Meaningful Life but It’s Putting You Into Debt?

Last week, I received a fascinating question from somebody I know back in Portland. Let's call her Aly. Aly and her husband have a great life, one that's built around their values. The trouble? This ideal life costs too much. They long for financial independence, but they're headed in the other direction. They're digging themselves into debt.

Here's what Aly wrote:

My husband and I both have jobs that we love that fit our values. He's teaching preschool full time and making a good wage. I'm working three days a week in an inpatient treatment program for people healing from mental illness and long psychiatric hospitalizations.

I'm somewhat underemployed (working at a job I am over-qualified for) but this was an intentional decision to keep balance in our home life and for me to maintain my own mental health. I anticipate over time I'll increase responsibilities as well as earnings in this job. I love the company I work for. They offer generous retirement and stock benefits. At this time I really want to stay put and so does my husband. It feels wise and healthy.

We love our home and have made every major improvement possible in the fifteen years we've lived here. Heck, you were part of that, helping us remove old shingles to get ready for the reroof! Our kids are in great schools and are thriving. We love our neighbors. We're not interested in renting a room or otherwise having other people live in our house as this is our biggest place of respite and again, a place to recharge and to nurture our children. We're one year in to a fifteen-year mortgage that we both feel thrilled about in terms of low interest and reasonable monthly amount.

In terms of cutting costs, we've consistently taken the angle of simplicity. I don't see any obvious new way that we can cut costs. We want our children to have important cultural experiences, so we pay for them to go to summer camps and for some after school activities. Our daughter will be going to Costa Rica with her science teacher this summer. These things aren't cheap, but we put careful thought into the ones we choose and again, make sure the mission of them fits our values. Additionally, we're paying for braces, but have done that though a flex spending account.

We have no car payment and are fine with the cars we have.

The bottom line is we keep ending up with debt that we can't cover and are building up a credit card balance that both of us feel bad about. This summer we anticipate some more expenses for a family reunion in Indiana that we go to every other summer. We'd hoped that we would have money saved up for this trip, but instead we find ourselves needing to fund this trip again on credit.

We anticipate getting a rather large inheritance within the next few years. I also anticipate earning considerably more as I get promotions and am able to work more hours when the kids are a bit older.

So, my idea to get out of this constant money stress is for us to get a home equity line of credit. The interest would be tax deductible and it would take some pressure off while we are in this window of time. It seems to be the one way we can benefit from the fact that our house is worth a ton. We really love it here, and really don't want to leave.

I'm sure I'm missing all sorts of important details. Doing the Money Boss net worth exercise was helpful. It forced me to get organized. I thought I was already pretty organized, but now I definitely have the information in clear accessible format!

I don't expect you to be our financial adviser, but as soon as my husband asked the “I wonder what J.D. would say?” I knew I wanted to write.

In many ways, Aly's story reminds me of the recent Atlantic article about “The Secret Shame of the Middle Class”. In that essay, New York writer Neal Gabler confesses that although his family enjoys a wonderful life, it's a life that keeps them on the knife edge of financial catastrophe. Like half of all Americans, he'd have a tough time of coming up with $400 to cope with an emergency.

It seems that my friend Aly is living the Portland-version of Gabler's life.

I'm not going to use this space to condemn Aly for the choices she's making. Instead, as I advocated earlier this week, I'll practice a little financial empathy.

On the plus side, Aly and her husband are making conscious decisions. They're not living reactively, doing things because that's how other people do them. Their choices are aligned with their purpose and values, which is awesome. But Aly needs to understand that all choices have consequences.

At the moment, Aly and her husband have elected to spend more than they earn. By doing so, they are deliberately sacrificing the option of having increased financial independence in the future. The tacit implication is that they consider today more important than tomorrow. If they're comfortable with that, fine.

But if tomorrow actually is important to them, then they need to make different choices. Their current situation won't fund the future, and there's no way it can.

If Aly's family chooses to save for the future, they'll need to give up stuff in the present. If they choose to live large today, they need to accept that they're sacrificing a richer tomorrow. To my mind, there's no right or wrong here. But Aly has to be willing to pay the price for whichever lifestyle she chooses.

Tom the Turtle on choosing a lifestyle

Aly claims that there's nothing left for her family to cut. But there is, and I think she knows it. She mentions a trip to Indiana for a family reunion and sending her daughter to Costa Rica, for example. Yes, these are important events, but if Aly doesn't have the money to pay for them, maybe she should forego the expenses.

Aly's family has more than one car. Do they need more than one car? Could they sell one? They could use the proceeds to pay down debt (or to fund Indiana and/or Costa Rica). I don't know their exact situation, but based on where they live, using public transportation might help them cut costs at least a little.

Note: A couple of times in her email, Aly makes a common mistake: She looks forward to future sources of money. It's fine to anticipate a raise or inheritance, but never bank on it. Far too many people increase spending because they assume they'll get some windfall or new source of income — only to discover this jackpot never materializes. Seriously, I've heard many many stories from families who screw themselves over by counting their chickens before they've hatched. Don't do it.

What if Aly's family decides today is more important than tomorrow? What if elect to visit Indiana and send their daughter to Costa Rica?

You might be surprised to hear that I'm not opposed to a home-equity line of credit. A lot of money experts advise against debt consolidation via home-equity loans. I'm not one of them. Why not? Because I've personally used this path to help get my own life under control. It made a huge difference.

With a HELOC, I was able to soften the bite of my debt payments (by lowering them), which increased my monthly cash flow. This helped me climb out of the hole I'd created for myself. That said, a HELOC can be dangerous if it's simply a source of additional debt, a way to spend even more.

In short, a HELOC is a great way to get debt under control; it's a terrible idea if used to increase spending.

The bottom line is that Aly can't have everything she wants. With her family's current income, she's unable to fully fund the present, let alone build a better future. She needs to decide what's most important to her. No matter which choice she makes, she'll have to sacrifice something.

What do you think? If you were in Aly's shoes, what would you do? When you already have the ideal life but it costs a little too much, what's the solution? Do you just bite the bullet and live with the debt? Do you make compromises and sacrifices? If you were Aly, would you take out a home equity loan? Why or why not?

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Olga King
Olga King
4 years ago

I’ve never had debt in my life. It helped that when I came to US 23 years ago, I came from a place where credit did not exist, and despite getting a credit card within 6 months, I used it like a bank card, always. And believe me, I lived in NYC for 11 years, raising 2 children who part of the time went to day cares, then to private school (not all the time), had afterschool programms, summer camps, babysitters at the younger age (I always worked, so did my then husband, who, by the way, spent years as… Read more »

Doug Ellis
Doug Ellis
4 years ago

I would recommend not taking the HELOC and go through the process of paying off the debt. My wife and I paid off our debt without HELOC (actually a HELOC was part of our debt) and what we learned in the process has put us on a course to financial independence. My advice to Aly is, make the sacrifice now so you can live the life you want in the future. Good Luck Aly!

Eileen
Eileen
4 years ago

Aly and her family sounds lovely and I love the thoughtfulness in the choices. However, while it sounds like they are prioritizing things (like work load balanced with mental health and family at the top), it doesn’t sound like the trade off is being accepted. The trip to Costa Rica is a huge luxury. We, too, used a HELOC to cover things we couldn’t at the time. We got a new roof for our house, some windows replaced, and had it painted. We always intended to pay more than the interest but didn’t do so very often. We have since… Read more »

llcall
llcall
4 years ago

This wasn’t directly addressed so perhaps there are some emergency funds that weren’t mentioned, but based on the credit card debt amassing, it seems safe to assume that they haven’t saved much for a true emergency. What if one of them lost their job suddenly or was injured? What would they do then? It’s laudable to want to give kids great experiences, but if you haven’t made provision for emergencies and one does occur, there is nothing to cushion that blow for them. I say this from a place of being a child when my father was laid off and… Read more »

Annie
Annie
4 years ago
Reply to  llcall

this was my first thought – she’s trying to do the best for her children, but the stress of not having money has an impact on children as well.

Beth
Beth
4 years ago
Reply to  llcall

I agree that security is the greatest gift! We didn’t have fancy vacations, fancy clothes and we lived frugally, but my parents never fought about the mortgage, never struggled with debt and there was never any doubt that there would be food on the table. There were job losses, unexpected home or car repairs, and other upsets, but there were also the resources to deal with them. I realize I’m privileged being born into a middle class family – one of my parents wasn’t. But as I’ve gotten older, I’ve seen how many middle class families are on the brink… Read more »

Mysticaltyger
Mysticaltyger
4 years ago
Reply to  Beth

Spot on, Beth.

I also think they should think about the money values they’re imparting to their kids by sending them on or taking trips they really can’t afford. Same thing goes with counting on increased financial income and an inheritance to get them out of their current bind. That’s what the Gabler guy did, too. He’s older than these folks and his life is stress filled. He never got off that stressful treadmill, likely has little or nothing saved for retirement, and now he’s out of time…and these folks are on the same stressful path as Gabler.

John
John
4 years ago

I think managing finances is a pretty big element to building an ideal life. I haven’t met anyone that is struggling with debt that doesn’t have some corresponding level of stress. If Aly truly had an ideal life, she wouldn’t have “constant money stress” (her own words). The impact stress has on our health and our lives is pretty well documented. My view is that they need to make it a priority to get their finances to a level that doesn’t cause constant stress. Most likely, that will mean either increasing income (without increasing spending) or reducing their spending. Some… Read more »

Ben
Ben
4 years ago
Reply to  John

I second this entire comment. An ideal life does not include constant stress due to personal finance issues. The HELOC seems like a short term fix. Is it better than credit card debt? Of course. But the bottom line is that they are will inevitably feel more and more stress from living beyond their means. Spending has to go down or income has to go up. Living out of financial balance only gets worse the longer you do it. My wife and I sold our 2nd vehicle last year. We didn’t have to. We just thought we could get by… Read more »

Jess
Jess
4 years ago

Could she maybe reconsider the summer camps and some of the extracurriculars for her kids? I mean, are we talking about month long summer camps that cost $5,000 and/or expensive private music lessons? Or are these expenses more modest? I know these things might be hard to give up (I know I’d have a hard time asking my kids to give up stuff like that, particularly if they are already used to it). But I also grew up without summer camps and my extracurriculars were modest (just what was offered through the public school – which maybe is what Aly’s… Read more »

Eileen
Eileen
4 years ago
Reply to  Jess

Your comment made me think about the ages of the kids and what their plan is for post-High School. Having a child that can travel to Costa Rica with out them, leads me to believe college isn’t *that* far off. I know JD’s feelings about parents paying for college ;-), but it’s not unusual for parents to help out to some degree. I would think a college education is in line with what the rest of their priorities have been thus far. Even if a parent just intends to help (not pay for all), it’s a big impact to anyone’s… Read more »

Mysticaltyger
Mysticaltyger
4 years ago
Reply to  Jess

I also grew up in a financially comfortable middle class home. But my parents prioritized being financially solvent and having no debt other than a reasonable mortgage. So we didn’t go on summer camps and trips to Costa Rica. Somehow we survived. And I agree with what another poster here said….the kids will come up with their own experiences when they get older. I suspect they’ll appreciate them more when they pay for it themselves. Both my sister and I have traveled to Latin America fairly extensively on our own dime.

Sara Weidner
Sara Weidner
4 years ago

I agree “constant money stress” isn’t the ideal life. I’d do the HELOC, but pay it off ASAP. I’d suggest really examining every single thing they purchase and determine it they can do without or find a less expensive alternative. I find my kids are my Achilles heel when it comes to spending. Of course, I want to give them every opportunity I can and I have a hard time turning down the best of everything for them. That includes summer camps and other extra activities. But the reality, is they don’t NEED all those camps or activities. We still… Read more »

Jess
Jess
4 years ago

One other thing: do Aly and her husband track expenses/have a budget? It seems a little unclear from her email. If not, I would suggest that she do so. It might reveal areas she can cut back on/hidden expenses.

She could also consider trying Digit or Acorns – for some people that sort of strategy can really work.

Thehappyphilosopher
Thehappyphilosopher
4 years ago

Where to begin… “I don’t see any obvious new way that we can cut costs.” This is simply not true even from what little information we have in the email. She does not WANT to cut costs. It’s not about can or can’t, it’s about want. She is asking permission from you to continue to spend and go deeper in debt under the guise of “good low interest debt” (HELOC). There is nothing wrong with this as long as she is willing to accept the consequences of her actions. It sounds like they are 1 layoff, trip to the ER… Read more »

chacha1
chacha1
4 years ago

If I were Aly, with a husband who prompted me to ask an outsider (if a friend) for advice on what appears to be a financial downward spiral, I would check my ego and listen to the answer(s). And then I would sit down with the family and say “look, here’s the deal.” Choosing present over future is – from everything I’ve read – maybe the single most common money mistake that educated parents make. They think “I have to give my kids this experience.” Actually no. You don’t. Kids who have hard-working loving parents, books in the home, and… Read more »

Fervent Finance
Fervent Finance
4 years ago

I don’t know if I’d go the HELOC route for Aly. Her and her family don’t seem to have spending under control and it seems like this may be a way for them to increase their spending. The most obvious thing is she’s only working 3 days a week. She could pick up 2 more days a week to obtain income which could go directly to paying down their debt. If I was in consumer debt, sending my daughter to Costa Rica wouldn’t even be an option. I know when I was younger and money was a little tight, my… Read more »

Annie
Annie
4 years ago

J.D. , this post is why I enjoy your writting. Kudos to you for really walking the talk. I agree with you, Aly needs to deeply evaluate her life and decide what’s important. If after contemplation, she and her husband decide that today is more important than tomorrow, than HELOC it up, and best of luck to them. And you know, they’ll be happy. It seems though, with the email itself being evidence, that she’s not entirely happy, and maybe should make a change. But, just because I would make a different decision, doesn’t mean that’s best for Aly. As… Read more »

Hannah
Hannah
4 years ago

I feel like Aly and her family are on a good track with the idea of having jobs that they enjoy and that allow them to have a good quality of life every day. That should be sustainable. Not everyone has to work at a high intensity and save 50% of their income, sacrificing relaxation now to secure FI at a young age. That’s good for some, but working at a job you like until a regular retirement age is good for some too. This family just need to cut back their spending so that it’s less than what they… Read more »

Mysticaltyger
Mysticaltyger
4 years ago
Reply to  Hannah

Yes, I agree that these parents will probably want to pay for their kids college, too–at least in part. They’re not going to be able to do that if they’re sending the kids to summer camps and Costa Rica. They want to give their kids “experiences”. That’s great…but those experiences can be just as expensive as cars or other stuff. You can overdo it with spending on experiences, too. If the experiences are creating stress because of the financial cost, then it defeats the purpose of having them. This cycle never ends. Summer camps when they’re young. Then college. Then… Read more »

Beth
Beth
4 years ago

My question for Aly is how do you want your kids to conduct their financial lives when they grow up? Would you be happy with them risking their financial security for trips and other cultural experiences? (And hope for a windfall or raise to rescue them?) Or do you want to see them look after their financial security first and then enjoy a few luxuries? (And find ways to earn some extra income when the budget doesn’t stretch to opportunities you want to take advantage of?) And then think about which behaviours you’re modelling at home. I think there are… Read more »

Mysticaltyger
Mysticaltyger
4 years ago
Reply to  Beth

Spot on, Beth. You said it all so very well.

Bob Reisner
Bob Reisner
4 years ago

The first job of a person is to provide economic security for themselves and their ‘family’. Without this, no one can act very long on those activities that bring happiness to themselves or help to others. This family is failing grandly. And setting a very bad example for the next generation. These adults have a very simple strategy. Do as they want and magic (raises, inheritance, lottery win, etc.) will happen. And when magic doesn’t, it’s not their fault because they were just doing good stuff for others. The situation described is about first world persons striving to ‘feel good’… Read more »

Mysticaltyger
Mysticaltyger
4 years ago
Reply to  Bob Reisner

Ouch! The truth hurts, but I do agree with you. When people make a choice to live for the present at the expense for the future, they never fully own up struggling as they approach old age. They never say “Hey, I gambled that things would work out as I got older and they didn’t and I accept that I now have to live in poverty or semi-poverty in old age as a result”. That just doesn’t happen. Instead, at best, you get articles from guys like Neal Gabler, who sorta kinda admit some culpability, but the true aim of… Read more »

CB
CB
4 years ago
Reply to  Bob Reisner

“I hope it all turns out well but I personally don’t like a life built on the hope that someone will die sooner than later.”

Here here. I understand that everyone dies sooner or later, but banking on someone’s death to help you afford your lifestyle is…not great. I personally think that no one has an entitlement to an inheritance and any that comes your way should be viewed as a bonus.

Tony @ pesoanddollar.com
Tony @ pesoanddollar.com
4 years ago

I truly empathize with Aly and her family. I can relate to her with two points – having constant money stress due to living a life based on a both of their values (providing the best for the family – especially the children – for learning and opening a wider world of opportunities for them) as well as having nothing else to cut in her spending plan. I’m not particularly experiencing the constant money stress since I’ve only started my journey from debt to financial freedom with building a starter emergency fund and am tackling my debts now – but… Read more »

Ryan
Ryan
4 years ago

worth noting that waiting for an inheritance bail out doesn’t always work out. despite years of my in-laws talk about “when grandpa dies, all the grand kids are going to be set”, the actual inheritance amount was <$2000. really glad we never let that talk influence any of our financial decisions.

Mysticaltyger
Mysticaltyger
4 years ago

Mr. Money Mustache would say Aly and her husband are infected with “Ivy League Preschool Syndrome” and I concur.

http://www.mrmoneymustache.com/2011/10/12/avoiding-ivy-league-preschool-syndrome/

Erin
Erin
4 years ago

As a biologist, Aly’s desire to help her child learn more about science, culture, and the world with a trip to Costa Rica resonated with me. What parent would not want to provide this for their child?! As an unemployed biologist, I would encourage Aly to sit down with her daughter, have a discussion about professional endeavors, and then schedule a meeting with a researcher/professor in the field that interests Aly’s daughter. This person can provide the best advice as to what might be helpful for a young person trying to start early on a professional path. I spent a… Read more »

Nicky
Nicky
4 years ago
Reply to  Erin

I LOVE the quote you end on! “Bloom where you’re planted.” Great advice too. I’m far older than Aly’s daughter, but have been thinking of a science based career change, and I might start reaching out to local professors after reading this. Thanks!

Mysticaltyger
Mysticaltyger
4 years ago

Erin had some great suggestions!

Mr. Money Mustache also wrote a new piece that touched on some of this stuff:

http://www.mrmoneymustache.com/2016/05/16/the-cheap-ticket-into-the-elite-class/

Chadnudj
Chadnudj
4 years ago

Can I point out one obvious place they could free up some cash flow?

They say they love their house, and it’s their forever place….yet they have a 15 year mortgage.

Why not go with a 30 year mortgage? The lower payments will free up cashflow for those instances where they need more in a month; when they don’t have those expenses/debts are paid off, they can always contribute extra to the principle on their mortgage. And if they’re going to stay there long-term anyways, why not go with the 30 year?

Sam Smith
Sam Smith
4 years ago

Lots of great comments. First, home equity line of credit is not necessarily a bad idea. But there is a greater risk, you are risking your home if you can’t pay. CC debt does not carry the same risks. Most “experts” would advise against home equity line of credit to pay for a vacation and that is what this writer is looking to do, family reunion and trip to Costa Rica for her child. Second, we all want to provide for our children, but you have to have a secure foundation first and it doesn’t sound like they have a… Read more »

Sam Smith
Sam Smith
4 years ago
Reply to  Sam Smith

My niece who is in college has been on two trips to Africa. My husband and I have remarked to each other that neither of us have ever been to Africa. I assume my brother paid for the trips both times, my niece did do fundraising for the second trip but didn’t come close to covering the cost of the trip. I remain in awe that this is a normal part of youth these days. When my daughter asks me to pay for her college trip abroad I have no idea what my response will be, but if I haven’t… Read more »

Tina in NJ
Tina in NJ
4 years ago

When the kids who get everything handed to them grow up, how to they adjust to having to pay for everything themselves? We didn’t have internet access and cell phone plans to pay for when we left the nest. It’s like life-style inflation, but it’s all these kids have ever known. I’m proud of J.D. for keeping an open mind about Aly’s choices and not judging. They’re her choices to make, but she has to deal with the consequences. Those include growing debt, stress, and no safety net. The readership of this blog is skewed to those who have made… Read more »

ZJ Thorne
ZJ Thorne
4 years ago

It is so hard to make new choices when you are so happy with your family life. But, you have to figure out what you value. You say the debt is a stress. Then you have to work on removing the debt in a concrete manner. Assuming more pay later is not good. Wages are stagnant. Things change. It is hard. It is hard for me right now. (I used an Earnest loan to pay off my highest APR credit card and it has made an incredible difference in my feelings of safety)

Diane C
Diane C
4 years ago

Beth and Bob both made excellent suggestions.

I really can’t muster much sympathy for dear Aly. She sounds a bit spoiled to me, and I’d hate to hear they lost the house because they ran up a heloc they couldn’t repay.

This article is useful as a cautionary tale. However, I doubt that Aly with a heloc = JD with a heloc. JD, you were a man on a mission when you played that card. Aly does not seem to have seen the light. Her risk of failure is too high.

chris
chris
4 years ago

I am basically Ally with kids, careers we’re happy in, jobs we love, big house we adore, awesome neighborhood, etc. After paying off significant consumer debt a few years ago, we let things slide and last year had to give ourselves a stern talking to. We now have a list of our priorities and are clear about their importance. We don’t want to be a burden on our children when they’re in their 20s (not to mention wanting to be free to take care of OUR elderly parents and travel to see our children in college), which could easily happen… Read more »

Joy
Joy
4 years ago
Reply to  chris

Brilliant! Love it! Involving the kids definitely gives them ownership in the decisions that are made.

Hannah
Hannah
4 years ago

To me, I think it’s fine to engage in “consumption smoothing” which is exactly what Aly is doing, and a HELOC is a cheap way to do that. The problem isn’t with consumption smoothing but the fact that I don’t think she has the right income expectations. Kids lives get busier rather than less busy as they age, and if they’re already in school it’s going to become more expensive. Her oldest may be in high school, but if she’s got younger kids she’s looking at 5 or more years of high expenses on a low income. I would make… Read more »

Eileen
Eileen
4 years ago
Reply to  Hannah

I mentioned the older kids in my post too. It’s also my experience that teens don’t require less, but more. Even just planning for adding kids to car insurance increases costs. If they excel at a given sport or talent and you wish to allow them to pursue that, you are paying more for coaches/teachers, etc. And like I (and others) have pointed out — college is looming. We are older than this couple and our youngest has ~2 years left of college. We’re helping out as best we can to get them thru with no debt (it “helped” that… Read more »

Jack
Jack
4 years ago

Great insight from all the comments above.

Having some experience dealing with family members in fragile mental state, her comment about being underemployed for her “mental health” leapt out at me. I suspect her husband recommended she ask JD so that JD could bring the reality check that the husband was unwilling, or unable (because he couldn’t, or she wouldn’t listen), to do himself.

Whatever the outcome, this family is better than average, financially, but headed for disaster. They need some tough love, fast, before they self destruct and take the children with them.

julie
julie
4 years ago

The day I faced the truth of what I spend MUST be less than or equal to what I earn was the day I started on the path to freedom. What I want is so much bigger than what I want right now, or what I want today. Who do I want to be? What do I want my future life to look like? Can I get there? How do I get there? Taking personal responsibility for your own today and your own tomorrow is actually very freeing. I was always afraid that setting limits like a budget would be… Read more »

Tina
Tina
4 years ago

Agree with what others have said above. If it was me I’d cancel the trips, this money is needed to pay off your debt and not keep digging a bigger hole. When I was in high school we sold candy, had car washes, paper route to save money for a trip to Spain. Unfortunately my best friend was not able to join me because she didn’t raise enough money and her family could not afford to help out. You may not want to look at giving up those options but ask yourself what are you willing to do to get… Read more »

Michelle
Michelle
4 years ago

I feel like I can really relate to this. I’m focused on saving for the future. My boyfriend lives for the now. It can be really tough, but I think we’re trying to make the best decisions possible and compromise. Best of luck to Ally!

Jubilant Jill
Jubilant Jill
4 years ago

Aly seems to be fine with making the easy choices, but is ignoring the tough ones. I don’t know if this is truly the case, but she sounds like someone who grew up with wealthy parents and feels she and her children “deserve” a certain standard of living. She seems like a lovely person, but her whole letter sounds like she’s justifying her choices. Just because she’s a good person trying to give her children “the best” doesn’t entitle her to live above her means. And it’s not fair to her children. All that said, is it possible to take… Read more »

CB
CB
4 years ago

I don’t buy the “meaningful life” mantra that Ally has adopted. She has chosen to live a life beyond her means, indulging in many luxuries that she cannot pay for. I don’t think that is a noble or smart choice.

Clearly Ally can do whatever she wants. If she wants to get a HELOC to deal with her spending choices that’s up to her and her bank. But if she put it out there to see what people think I’ll give my honest opinion: I think she’s making a mistake.

Joy
Joy
4 years ago

Wow. So many thoughts from this story, but basically I guess it comes down to this one thought for me: It isn’t a noble choice nor in line with rational values to put your family at risk financially. Taking out a HELOC that puts that wonderful home at risk — the basis of many families’ security, access to good schools, etc. — just so that children can go to expensive “enriching” activities is not wise. The jury is out on whether many of those so-called “enriching” activities really have the effect that parents want them to have anyway. I think… Read more »

Brooklyn Money
Brooklyn Money
4 years ago

The wise words of Suze Orman come to mind “You can’t afford it!” 2 choices — either cut costs or increase income, preferably both. I agree with others who said re-fi to a 30 year. A HELOC is potentially very dangerous.

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