Using Your Home Equity as a Bank

— Slide 2: Use the BLOC to Manage Your Money —
Making Your Money Work for You

  • If you have any debt, you should never let your money sit idle in a bank checking account

    money sitting in your checking account is not working for you; it is only making the bank money.


For this demonstration:

let's say that your monthly net income is $5,000 (paid twice monthly) and your monthly living expenses are $4,000.

Your bank checking account would look like this:


Date

From

To

Withdrawal

Deposit

Balance
July Pay Direct Deposit   $2500 $2500
July Checking Mortgage Pay $1250   $1250
July Checking Living $1000   $250
July Pay Direct Deposit   $2500 $2750
July Checking Auto Loan $500   $2250
July Checking Living $500   $1750
July Checking Living $750   $1000
Ending Month   $4,000 $5,000 $1,000
Why let the bank use your money

What the diagram illustrates is that the bank had access to your positive account balance throughout the month paying you zero or little interest for that use.

Banks then turn around and use that money to lend to consumers and businesses at higher rates.

How about letting you use the money

the "Banker" credit line program will work just like a bank by using your positive cash balance to pay down debt and to finance life-events.

let's review this further in the next slide

 

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