Two Money Mistakes to Avoid
Just as today's wants quickly morph into tomorrow's needs, bad money moves often turn into recommended money moves. As reported on MSN recently, borrowing against your home equity or retirement savings used to be considered bad ideas. But today many lenders routinely promote home equity loans as good ways to pay off credit card debt and most 401(k) plans offer loans.
Columnist Liz Pulliam Weston says both forms of borrowing are bad ideas. Research shows that when people take a home equity loan to pay off credit card debt, the credit card debt usually reappears within two years. That's because they never dealt with the root causes of the credit card debt. As for borrowing against your 401(k) plan, one problem is that if you leave your job the loan will need to be repaid quickly or you'll be hit with an early withdrawal penalty and taxes.
Matt's View
If credit card debt has you contemplating a home equity or retirement savings loan, download my free Dumping Debt pak first. There's no magic wand inside that'll erase your debts overnight, but it's a proven plan that'll help you get out and stay out of debt.
This article filed in: Debt , Homes/Mortgages , Retirement , Saving
Managing Money by The Book
- "Be joyful in hope, patient in affliction, faithful in prayer." - Romans 12:12
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