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Find the Best Interest Rates on Savings Accounts
Are you looking for a place to park your savings that will earn a respectable rate of interest, such as 6 or 7 percent? You can stop looking. Nothing close to that exists in this economy. Readily available are savings accounts with 0.5 annual …Read more.
Pet Health Insurance? Get Real!
If you have pets, you know that animals come with unavoidable expenses. But the day-to-day expenses to own a healthy pet are a drop in the food dish compared with what you'll spend if you decide your pets deserve the latest and greatest medical …Read more.
This Desperate Situation Requires Drastic Measures
Dear Mary: I've been reading your Debt-Proof Living newsletter and blog for some time now. The problem I continually run into is where to begin. I don't have enough money to pay all my bills each month. So how do I begin to save money? My bills come …Read more.
How To Trick Yourself Into a Big Savings Account
Now and then, a great reader tip washes up on my desk that causes me to wonder, "Why didn't I think of that?" It makes so much sense: Think of your paycheck as 100 percent savings. Then, as you must, transfer into your checking account …Read more.
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New Mortgage Repayment Method a Risky Business
Dear Mary: I recently took a Web seminar on Money Merge Accounts in which they talked about the idea of paying down a home mortgage using a home equity line of credit. They told us to use the home equity line of credit as a personal checkbook to pay all our expenses. But how would using a home equity line of credit that has a higher rate of interest be to someone's benefit? -- Mike, e-mail
Dear Mike: Money Merge Account is a trade name for a somewhat complicated mortgage repayment technique. Generally, the technique requires you to have a home mortgage, impeccable credit, a lot of equity and a big low-interest home equity line of credit. At the beginning of every month, you determine your total take-home pay for the coming month. Then you transfer (borrow) this amount from your line of credit at the beginning of the month -- before you actually receive the income you have projected -- and send that to your mortgage holder as an extra principal payment. Next, you arrange to have all of your paychecks deposited directly into the line of credit. You write checks against the line of credit using it as your household checking account. Simply put, you never allow yourself to have money sitting in a bank account. You pay everything with debt. Every dollar you earn immediately goes to cover some debt. A company, United First Financial, has taken this general theory and named its home equity line of credit the Money Merge Account. If I understand their program correctly, for a fee of $3,500 -- and if you can qualify -- you get their equity line of credit and software for your computer that supposedly lets you track, project and manage this tricky repayment technique. United First Financial peddles the MMA and software in free, high-energy seminars. There's some logic to the theory, but in reality, I find this terribly risky, if not dangerous. The adjustable interest on the underlying line of credit could turn this thing upside down in a hurry, should interest rates rise. I wouldn't touch this mortgage repayment method with a 10-foot pole. But don't take my word for it. I challenge you to run this by a licensed CPA to see whether he would buy this deal -- or even take it for free. If you have $3,500 to spare, I recommend you use it to pay down your mortgage principal. You'll whack years from the payback period and a load of interest, too -- on your own. No juggling and no software required. Do you have a question for Mary? E-mail her at mary@everydaycheapskate.com or write to Everyday Cheapskate, P.O. Box 2135, Paramount, CA 90723. Mary Hunt is the founder of www.DebtProofLiving.com and author of 17 books, including "Debt-Proof Living." To find out more about Mary and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.
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