Doing Dumb

I've done dumb in many areas of my life, but I done costly dumb when it comes to finances.  Proverbs 18:2 says "Fools find no pleasure in understanding but delight in airing their own opinion."  How true that is!  I have been way too clever for my own good and found out the hard way that there is a difference between being clever and being wise.

In 2005, my wife and I purchased a house. We didn't have enough for a 20% down payment so we took out a Home Equity Line of Credit for $50,000 (mistake #1).  Here's where I get clever.  I choose to transfer money from my HELOC to low or no interest credit cards because I could pay a much lower interest rate. What could possibly go wrong?  All I have to do is transfer the balances back to the HELOC when the low interest rate expires. That proved to be really dumb.

After moving all but $16,000 to these credit card offers, the bank dropped our Home Equity credit limit to $16,000 without warning.  What!? You mean I now have $34,000 on credit cards and I can't transfer the balance back to the Home Equity Line? Yep.

I spent the next few years transferring from one credit card to another until I finally got fed up and attacked my debt.  Today, Jessica and I have paid off all the credit cards and are about $10,000 away from paying the rest of the HELOC off.  We feel great about the progress we made and the choices we now make, and it is all because I stopped airing my own opinions and began delighting in what God says about finances.

I'm sure you have your own stories about doing dumb and I would love to hear about them.  Let me know in the comments what your dumb maneuver was and what you did, or are doing, to fix it.

If you are struggling with debt, you can check out my blog post titled "Debt Crisis!" for some insights.