Holiday News That Really Hits Home: Home improvements, education for the kids and new business financing are relatively better uses of equity and much better gifts than buying under-the-tree presents, holiday parties and unplanned winter wonderland vacations.
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by Broderick Perkins
© 2008 DeadlineNews.Com
Unauthorized use of this story is a copyright violation -- a federal crime.
Deadline Newsroom - Unless it's gingerbread, don't "eat your house" this holiday shopping season.
Taking bites out of your home equity to pay for presents could lead to financial indigestion.
Home equity is the difference between your mortgage balance and the value of your home, not collateral for frivolous expenditures.
Any loan tied to your home's equity is, by nature, an equity-depleting loan. The best use of equity money, the experts say, is for capital improvements and investments that provide an equal or better return on your money than the cost of the loan.
Home improvements, education for the kids and new business financing are relatively better uses of equity and much better gifts, than buying under-the-tree presents, holiday parties and unplanned winter wonderland vacations.
Debt consolidation and emergency nest eggs can be other wise uses, provided those uses don't become habitual.
Saving for the holidays and the season beyond is always a much better financial approach.
Creating a holiday budget plan with a holiday savings-spending account is crucial, not only for the season of joy, but also throughout the year.
• List your monthly living costs, including essentials like house or rent payments, food, clothing, health care costs, transportation to work and utilities. Tally these necessary living expenditures help estimate how much discretionary spending -- if any -- you actually have.
• Prioritize. Shelter -- rented or owned -- is your primary and foremost cost. If extra debt burdens your ability to pay the rent, your mortgage or other necessities, accept that you can't afford the extra burden.
• If you have the discretionary cash, create a gift list that cuts back on gifts for "social" friends and acquaintances. Give a card or be creative and give home made individualized gifts.
• In the spirit of the holidays make donations to housing operations for the needy in honor of your family or friends instead of individual gifts.
It's the thought that counts. Especially the thought of hanging onto your home.
When it comes to home equity, don't leave your home without it by using your home to foot your gift-giving bills.
Like this story? See: Gifts that really hit home
Home safe home for the holidays
Eat, drink, be wary at holiday house parties
Home safe home for the holidays
Eat, drink, be wary at holiday house parties
© 2008 DeadlineNews.Com
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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the Deadline Newsroom, DeadlineNews.Com's news back shop. Perkins is also a National Real Estate Examiner. All the news that really hits home from three locations -- that's location, location, location!
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