A home equity line of credit, though secured by the
equity you hold in your home, isn't quite the same as a mortgage or
other loan that you take out to purchase an asset. Generally, the
Lifetime Planner classifies a balance on a home equity line of
credit as an expense, although you can change that if you want.
To add a line of credit to your Money file(A computer
file that stores the information that you enter into Money. A
single Money file can contain many accounts, so if you have a new
account, bank, or brokerage, you can add those accounts to the
Money file that you already use.) :
Click Banking, and then click Add a
Click Other account type, select Line
of Credit, and then click Next.
Follow the instructions on the screen.
By default, the line of credit will not be included in your debt
reduction plan (because of its low interest rate and because it's
likely to be used to cover expenses), but you can move it into your
debt reduction plan if you want. For information about adding a new
debt account to your Lifetime Plan, see Add or
remove a debt account from the debt plan.
Adding it to your debt reduction plan will also incorporate it
in your Lifetime Plan. Any balances you have in the account will
appear in your Money file as a liability and will be subtracted
from net worth(The value of everything owned by you or your business,
minus any of the values of any liabilities.)
The Lifetime Planner records assets that you hope will grow in
value over time and that could be sold to fund a goal. Unless your
car is a museum-quality Bentley, for example, it isn't this kind of
an asset; it's something that you'll use up and eventually replace.
The same goes for a washing machine or a computer.
For planning purposes, it's better to think of a car or a
similar item as an expense-one that you happen to pay for all at
once, even though you use the car over time. You can't rely on
those items to hold their value, so you can't rely on them to
contribute to your long-term financial health. Therefore, it's more
sensible to exclude them from your Lifetime Plan's asset figures.
For information about adding special expenses to the Lifetime Plan,
see Add a
new special expense to the Lifetime Plan.