How our credit line became a $70,000 mill stone

In the late 1990s, my bank started calling me offering a mysterious thing called a line of credit. All I had to do was come by, sign a document, and I could afford any renovation my heart desired. With a mortgage under $100,000 and a house worth double that, I was guaranteed approval.

I turned it down because I didn’t think I needed the extra money and I didn’t want to go into debt. I remember feeling superior and asking a friend:  "Who are these people who don't live within their means and need all that credit?"

Five years later we had a new house which needed to be rewired to bring it up to code.  It would cost $10,000 but the bank said we qualified for a $50,000 unsecured line of credit.  if we'd stopped at the $10,000 I wouldn't be writing this post. But we didn't.

We lost our frugal ways.

We had paid for a  renovation at our first house  through an extra $5,000 saved so that I could have an extended maternity leave. We didn't need that cash, so spent it on the basement.  This time, we had all that extra credit. So after we replaced the knob and tube wiring,  we went at the old 1920s kitchen. 

We gutted the existing kitchen,  installing 15 feet of cupboards, a gas stove (not really needed, but much wanted), and nine feet of counter space. 

Instead of saving as we did in the "old days,” as David Chilton told Moneyville editor Adam Mayers, we just kept writing cheques. A sewage backup followed, then a big bill for wonky plumbing in the upstairs bathroom.

My  husband went back to school (Alison Griffiths sees education as a good debt) and gosh knows what else. How it ballooned to $70,000 is anybody’s guess but it ends there. 

The trick to tackling the line of credit  is to stop renovating. Or move to a newly-built house.

Now that the basement bathroom is completed (after six years of planning) we are applying $400 a month to the $20,000 second line of credit. This amount comes straight off my paycheque.  We`ll also be using our income tax rebate to pay down this debt. By next year, $10,000 will be owing and my wish is to double the payments.

All bets are off, however, if the roof needs replacing.