Saturday, November 28, 2015

He's got an idea for emergency funds

DEAR HARRY: I'm 28; my wife is 25. We have been married for about a year, and we've started to build up an emergency fund.

We each contribute enough to get a full company match on our employers' 401(k) plans, and we have some money left over at the end of each month, which we add to our emergency fund.

My older brother suggested that we get a backup plan until we get enough in that emergency fund. He said that he got a home equity line of credit (HELOC) until he was able to have his own fund. We own our home with about $35,000 of equity. Both my wife and I have very good credit scores, so we should be able to get a HELOC and with a decent interest rate.

What do you think of this plan?

WHAT HARRY SAYS: I like it. With good credit ratings and substantial equity, you should be able to do this at a very good rate of interest. In your negotiations, go for the lender to waive closing costs and inactivity fees. The danger here is that your home is on the line.

Some people get "money happy" and use the credit line for unnecessary luxuries like fancy travel or cars. However, from what you have said about your handling of money, I don't see you in that situation.

Good luck!

Email Harry Gross at, or

write to him at Daily News, 801 Market St., Philadelphia, PA 19107.

Harry urges all his readers to give blood. Contact the American Red Cross at 800-Red Cross.

Daily News Personal Finance Columnist
We encourage respectful comments but reserve the right to delete anything that doesn't contribute to an engaging dialogue.
Help us moderate this thread by flagging comments that violate our guidelines.

Comment policy: comments are intended to be civil, friendly conversations. Please treat other participants with respect and in a way that you would want to be treated. You are responsible for what you say. And please, stay on topic. If you see an objectionable post, please report it to us using the "Report Abuse" option.

Please note that comments are monitored by staff. We reserve the right at all times to remove any information or materials that are unlawful, threatening, abusive, libelous, defamatory, obscene, vulgar, pornographic, profane, indecent or otherwise objectionable. Personal attacks, especially on other participants, are not permitted. We reserve the right to permanently block any user who violates these terms and conditions.

Additionally comments that are long, have multiple paragraph breaks, include code, or include hyperlinks may not be posted.

Read 0 comments
comments powered by Disqus
Also on
letter icon Newsletter