Debt Nation: From Home To Prison Cell – Don’t Use Debt For Home Improvement


A house is not a home until you’ve lived in it comfortably. It provides you shelter from the elements and a bed to rest your weary head upon. You look forward to every waking day – opening the curtains to greet the sunshine – then head off to the kitchen for your first mug of coffee.

It is no wonder that people love to do home improvement. They love their homes and want to make sure it looks and feels brand new every time. However, home improvement can be quite expensive.

Statistically, it is on the rise.

According to a study by Houzz & Home, of its 107,000 registered homeowners, 56,000 conducted home improvements in 2017. The average expenditure per homeowner was listed at $60,400!

The need to improve their homes may encourage homeowners to use debt to finance the renovations. This can lead to a serious miscalculation as studies have also shown that homeowners end up spending more than they anticipated when it came to home improvement.

You may end up borrowing more money than you originally planned for. If this happens, your monthly cash flow will be thrown off course. It may affect how you balance your budget and pay off your important obligations.

How do people use debt to finance their home improvement project? Here are the top choices of debt:

  • Credit Card
  • Home Equity/ Home Improvement Loans
  • Personal Loans

These loan facilities charge you exorbitant interest rates in addition to giving you false hopes. Credit card and lending companies paint a rosy picture of your dream home without telling you the other side of the story – the harsh realities of a loan default.

Whenever you take out a loan, you should always factor in contingencies or the “What Ifs”.

  • What if you get laid off from work?
  • What if a medical emergency arises and you have to take care of it?
  • What if business takes a nose dive?

These situations will have an adverse effect on how you can keep up with the monthly payments for the loan.

What might happen is that the home improvement project gets put on hold. Sections of your home will be left unfinished. Every morning you wake up to walls that are not completely plastered or painted. Fixtures are not properly installed. The undertaking was much more expensive than initially thought of.

To make matters worse, you have to wrestle with the reality of paying more debt every month.

The house no longer feels like a home. You feel trapped. It is not your home until you pay off your debts and the work is completed. You are confined. It does not feel like a home.

It feels like you are holed up in prison – a debt prison where the only way out is to settle the obligation.

Instead of using debt to finance your home improvement, save up for it.

One year out, ask an architect or an interior designer to give you an estimate for home improvement. Set aside money for it every month – put it in the “Home Improvement Savings Account”. Remember to factor in an increase in the cost of the home renovation project.

After one year, you should be ready to carry out your home improvement project without the extra burden of having debt on your back.

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