Using Your Home Equity as a Bank

— Slide 7: Using Discretionary Income to Pay BLOC —
Discretionary Income vs. Emergency Funds

You May be Thinking

what's the difference between paying down the BLOC with your discretionary income or just sending in an additional amount to pay down the HVAC loan or any other debt?

Let's explain it this way:

Do you set aside extra funds in your money account for emergency or other need?

Many financial savvy families will maintain some savings in their money accounts for emergency or other event (i.e., vacation expense). The money sits in their checking or money market account earning little or no interest.

Some families my use some of that money to pay down a debt, but not all of it. They want to leave some dollars in the account for an emergency or other need.
With the BLOC, your equity line is your emergency fund

In other words, by using all of your excess income to reduce the BLOC balance, your money is working constantly to pay down your BLOC balance to reduce interest charges.

You don't need to set aside emergency funds with the BLOC your entire credit line is your emergency slush fund (i.e., your bank).

So all your money is working for you. And whenever you need extra cash, you simply advance yourself money using your BLOC.

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