Good morning, sir… Pardon my delay…
Keep in mind this is just my 2 cents… Feel free to ask questions about any of this stuff at any time… This will probably be long for a text-message…
We were looking into a HELOC a number of months back. It’s much more involved than I thought. I’m not sure how your house is set up (mortgage, title, etc.), but with a HELOC (and probably a HE-Loan) there’s a closing (appraisal, etc.) for that and everyone on the house basically needs to sign off on everything (per my understanding) and their details (tax returns, etc.) all need to be part of it all for the underwriting process. Again… I’m not sure of your details, but it’s something to consider.
With regard to really getting out of the hole, a budget is the first thing I’d start with (just like that “Cashflow 101” game). Put all of your expenses / income into a spreadsheet or ledger or something that you’re able to track (Mint.com is a free and decent place to start). This should give you insights on where you are, where you’re going, and how you’re getting there. You’ll be able to make better decisions along with projections on “how bad is my situation?”, “can I make behavioral changes that can get me out?”, “is my lifestyle too much and I either need to cut back or make a lot more money?”. Basically, it’s a financial GPS (i.e. where you are, where you want to go, and how you’re going to get there). Without knowing these details, getting out of the hole is basically this gray area that allows for continuing on the current path. The details should be concrete (very detailed, etc.).
In my experience, a lot of cost cutting can happen at the beginning, but then the cost-cutting can only go so far (needs vs. wants). Another thing is to stay liquidating (selling) certain things you’re not using, and taking those proceeds and paying down the debt (while not accumulating more). That’s really the game (i.e. the golden rule -> “spend less than you make”).
Pardon my tangents, but from the technical perspective, I’d figure out a plan on how you’re going to get out of the hole before making the moves to get out of the hole. Perhaps you’ve already figured that out, but the plan could be years or decades of time and usually takes some changes that can be difficult and painful.
Also, technical, first and foremost, create a plan (and stick to it) that makes your savings / bank account balance increase every month (without this, all other actions are useless). Move your debt around to lenders / creditors that have the best terms (lowest interest rates, no balance transfer fees, longest “promo” rates, etc.) you can (credit unions are usually best, but their processes can really suck). When paying things down, pay down the highest interest rates first (if possible) while paying the minimum on all other lower-rate debt. Most of this you probably already know, but I’m just throwing it out there…
Anyway, I hope that helps at least a little bit… And feel free to ask any time… I’m all about talking about money, debt, arbitrage. 🤑🤑🤑
