Do you think it is wise to borrow money in today's market with all the job uncertainty? I am looking at doing some renovations to my home although I am still paying a mortgage.

Dear Reader,

 

The answer is that it all depends on what you are borrowing for, how much you are borrowing and the degree of uncertainty in your area of employment. If you’ve a permanent job, have a small mortgage and no other debt – and want to borrow for a modest renovation - then it’s probably an acceptable plan as long as you’ve got the cash flow to pay it back. However, if you are not in a stable job you should consider how long it will take to pay off the loan and if you have an alternative plan if you get laid off. A good planning strategy is that you first establish a goal to save 50 per cent of your project’s cost before you go ahead. Then you can plan to advance the other 50% from the line of credit. While this may require time and patience, this can actually reduce the amount of money you borrow, have a backup plan in case things fall short and help you to make spending decisions more carefully.