The theme this week on the Retirement Quick Tips Podcast is: Inflation Is Still Getting Worse! What To Do Now

Today, I’m talking about securing a home equity line of credit now. Yesterday, I talked about paying off all of your debts, so it may seem odd that I’m telling you to go out and get a home equity line of credit. 

If you own your home and if you’re like many Americans with substantial equity in your home, a home equity line of credit or a HELOC, can be an important emergency source of funds if you get hit hard financially in the next recession.

That’s because a HELOC can be tapped into as an alternative to racking up credit card debt or using your 401k as a piggy bank if you run into serious financial issues. The rates on HELOCs are much lower than credit card debt, with usually much higher limits. You can borrow up to 85% of the equity in your home, and you can apply for and get approved for a HELOC, and never use it. 

But the time to apply for a HELOC is now, before a recession hits and financial conditions tighten. If you end up being laid off, it could prove impossible to get a HELOC, so it’s best to take care of it now. 

Knowing that you have a reserve of up to several hundred thousand dollars of equity in your home will help you sleep better at night and will help you make rational decisions should you find yourself in a real financial emergency. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance