HELOC Account

I just opened a HELOC account for home improvements, I’m planning on creating this account under credit cards due to the multiple withdrawals and payments and fluctuating balance. I played around using a debt account and it didn’t seem to be too friendly with the various transactions. Any other suggestions?

Create a regular Account named “HELOC” and set it’s balance to your credit line. A line of credit is basically an Asset. If your line is $20k then set the balance to $20k. This will increase your Unallocated by $20k which you can then allocate as you desire to the various budget envelopes in your improvement plan. $5k for new bathrooms, $10k for kitchen, whatever.

As you spend money on improvements from the HELOC account, the balance will go down reflecting the reduction in credit available. If you make payments back to the HELOC it’s just an account transfer from Checking to HELOC.

If there are interest charges that add to the amount due, record them as expenses which reduce the credit available.

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Thanks for the other option👍

If having it all in Unallocated is too tempting or confusing, I’d create a goal envelope to mirror the account (this is how I manage Savings in GB). Then you can either spend from that envelope directly, or for better budget transparency spend from an appropriate envelope and then transfer money between the HELOC and “regular” or Unallocated envelopes.

@Tiffany Thanks for your input👍