When people find themselves in a mound of credit card debt and there doesn’t seem to be any way out, using home equity sometimes provide that “light at the end of the tunnel” feeling. Should this option be pursued, or avoided altogether?

This option was listed in an MSN Money article entitled The 3 Worst Money Moves You Can Make. Obviously you can see the slant they provide. Like most other things, there are always multiple ways to look at things and each situation is unique.

I’m definitely not a fan of using the equity in your home to fuel a consumerist lifestyle. I think most rational people would agree. This however, is not really the problem. When you’re loaded with debt from credit cards and the like, you tend not to think as rational anymore; it becomes more emotional.

Realize that paying of the credit cards is not the ultimate solution to the problem. You need to figure out how you arrived at your current situation in order to make sure it doesn’t happen again. Also, realize that paying off credit cards with home equity is not paying off the debt; it’s merely shifting the debt.

You need to firmly commit to paying off your debt. Once you’ve made this commitment, you can then begin exploring options to help in this endeavour. Using the equity in your home is one of these options. Other options may include balance transfers to another card with a lower rate or promotional offers.

Using home equity can make a lot of sense and is a viable option for those carrying credit card debt. However, remember to treat it as a balance transfer that allows you to reduce your interest payments and therefore pay the balance off quicker. The focus should be on reducing your debt in the timeliest manner possible.

I thought I’d give you a look back at some of the most popular posts since this blog’s inception. If you’re new to the site, browse around and enjoy the posts. For the loyal readers, it’s always nice to review some things. Either way, make sure to subscribe to the feed for the latest updates.

Answering A Reader’s Question: This addresses the question of what sort of investments to choose for your Roth IRA, especially if you’re not savvy with stocks. There’s always a lot of discussion about the benefits of a Roth IRA, but not as much about what actually to invest in. This has been the most read post to date.

Restaurant Lifestyle…?: This is a few thoughts on living the restaurant lifestyle. Why do people do it so much, and what can we do to alleviate some of the costs.

Developing a Wealthy Mindset: Instead of focusing on the lifestyle of the rich, here are a few tips to start developing the mindset of the wealthy. It’s some food for thought to get you on the right track.

Investing with Peter Lynch: There is so much investment advice out there and it’s not all the same. This article delves into 8 fundamental principles that Peter Lynch uses when picking his investments. Definitely a good read.

Hopefully you’ve gained something from these articles. Also, if you have any suggestions or topics you’d like to see covered, feel free to send me an email and let me know.

I want to make you aware of a few deals that I’ve been made aware of. It’s always nice to save a couple bucks here and there, so why not try it with some of these.

Restaurant.comAs you probably know by now, I’m a big fan of this site where you buy gift certificates for a reduced price ($25 for $10 and $10 for $3). Well, now you can get an extra 50% off the already cheap price. That means a $25 gift certificate for only $5 or a $10 gift certificate for just $1.50. All you have to do is enter the discount code SUMMER and hit recalculated total. If you haven’t yet tried this site out, now is the perfect time. But, you’ve got to act pretty quick. The extra 50% off is only good through Sunday, June 24th. You only have to purchase it by the 24th though, you can use it whenever.

GoDaddy.com This site is one of the largest and most recognized sites for purchasing domain names. It’s also where I just recently picked up my domain name. Well, now they’re having a sale where you can register a domain name for just $6.95 instead of the usual $8.95. If you’ve been putting it off, now is the time to get that personal domain name. Just click the link here, and you’re on your way. Also, if you’re still using the (dot) blogspot extension, all you have to do is get the domain name and blogger will still host it for you for free.

ING Direct - High Yield Savings with 4.50% annual percentage yield!I would also urge you (if you haven’t already) to set up a high yield savings account where you can hold your emergency fund. Unlike a normal money market fund, this account is FDIC insured up to $100,000 so you’re assured of having your money when and if you need it. Also, if you’re willing and able to start your account with at least $250, send me an email with your name and email address. I can then send you a link through which you’ll receive $25 just for opening the account (Full Disclosure: I will also get $10 for the referral).

These are a few really great offers. If one or all of them are right for you, then go ahead and take advantage of them. I will also say that the provided links are affiliate links which help to keep this site up and running. Thanks for reading and thanks for your support.

Budgeting is an activity that some people actually enjoy. Most people, however, detest budgeting or are at most indifferent towards it. Whatever your feelings about the subject are, it’s important to at least understand the objective and the general principles.

Whether you’re in business or just managing your own personal finances, the goal of working to a budget is to increase wealth through careful planning. This is an important concept to grasp because there is a large misconception among many that budgeting is there just to make sure that we don’t spend more than what we earn. This is very important, but budgeting is much more than that. The goal of any business is to increase shareholder wealth. This can also be true for your own finances.

I’m not going to tell you how you should budget because it’s different for everyone, but I will explain what some people do and then how I approach the subject. Let’s first talk about traditional budgeting. This is the more tedious form of budgeting where you scrutinize different categories of your spending and budget certain amounts for each of these categories. For example, you might decide that you’ll allocate $300 per month for food and another $200 for entertainment and so on down the line. You then make sure that the total of all expenses are less than your income. Also, don’t forget to budget in savings and investing. If this is your style, then more power to you.

Now let me explain how I “budget”. I’m not a big fan of getting so detailed into planning exactly how much I’m going to spend in certain categories. Instead, I take a certain percentage of all income and put it towards charitable giving and into savings. I then take another percentage and allocate it for investing. After this, whatever is left is free to spend on everything else including living expenses and entertainment. Doing things this way simplifies the process and it ensures that my top priorities are always being met.

However you choose to budget, it needs to be something that you’re comfortable with and that you will stick with. It does no good to start, only to later give up on it because it’s too complicated or time consuming. So have a go at it…

In today’s society, the entitlement attitude is becoming more and more prevalent, and I’m sure you’ve run across a few of those individuals who exhibit this quality. This quality is also not age specific even though some might think it only applies to teenagers. I’m not trying to call out individuals and reprimand them for having such an attitude, but rather bring up the subject because I believe it’s at least partially in all of us.

Many young professionals go out and get a new car shortly after getting their first “real” job out of college. They now believe that they “can” and that they somehow deserve it because of all the years of “poverty” they experienced while in school. Think of the financial future that could be, if you could make do with a quality (and less expensive) used vehicle.

You’ve probably also all seen the young children who make a scene in the store because they want something really bad. The sad thing occurs when the parents give in because they don’t want to say no. Adults have this same problem except there isn’t anyone to tell them no; in fact, credit card companies and other lending institutions are continually prodding them to say yes.

We also fall into the trap that because “everyone else is doing it” we have to as well. Since when do you need a new big screen TV just because your friend went out and got one. Do you really need to take that Europe vacation, or is it because your friends really want you to? When so many people are living such a life, it can be easy to feel that it’s normal. Just because others are, doesn’t mean you have to live beyond your means too.

No matter at what situation you find yourself in life, you need to decide what’s most prudent for you. Don’t mortgage your future because you believe you deserve it now.

There a small audio clip that I had heard about two years ago where a guy from Dallas just witnessed an accident and is describing it to a friend on the phone. I was just sent a link to this clip on the web, so I thought I’d share it with you. I’m also originally from Dallas, so maybe that’s why I find it so funny. Check it out:

Dallas Accident

Credit is an integral part of anyone’s personal finances. Credit cards are sometimes the only way to pay for things such as airline tickets and car rentals. Most people need to take out a car loan or a mortgage at some point as well. Because of this need to obtain credit, it’s important that we maintain a good credit rating.

Sometimes however, financial problems happen to otherwise financially savvy individuals. If this is the case, there is still the option of bad credit mortgage loans or other less than stellar credit options. While I’m not a fan of these types of loans at all, they can sometimes be helpful for rebuilding your credit rating. There is also the possibility of getting a secured loan for which you put up some sort of collateral. I would, however, proceed with caution when looking to pursue these options.

This is a sponsored post.

 Subscribe to Fiscal Musings if you like what you’re reading.