Times are definitely tough, and you’ve been cutting back just like the rest of us.  But your sanity doesn’t have to suffer; you need a vacation, especially now.  You just need to find the cheapest way to travel.  I say, a fun and relaxing time need not be expensive!

• Because of the sloping economy, you can find a lot of great deals without having to be creative about your spending.  Even a place like Las Vegas, notorious for sucking money straight out of your pocket, has dropped prices lower than ever.  For example, book at the right time and you could stay at the MGM Grand for $80 a night, when before the recession you would’ve paid $200 for the same room.  Check out travel sites like hotwire.com and expedia.com to book your entire vacation on the cheap.
• If the debate for you is actually between whether to drive or fly, that’s going to take some math.  You’ll have to weigh the cost of gas prices and your car’s gas mileage against the cost of a round-trip ticket.  And again, because of the economy, a flight ticket can actually be cheaper right now.
• Wherever you go, consider traveling during the off-season.  You might not be able to experience some of the location’s big events, and some popular tourist spots might be closed for the season, but overall, you’ll pay less for your flight, hotel, car rental, meals, etc.  If you’re going to see specific attractions, like a national monument or theme park, welcome to shorter lines!  And if it’s just you and your significant other, you could have a more intimate and romantic experience with fewer people around.
• Travel with another couple or a group of friends.  Splitting the cost of a vacation can make something normally out of reach for you actually affordable.  If you’ve been wanting to head somewhere tropical but can’t afford it even at current lower rates, a group trip can make it a reality, albeit a little less intimate.  But saving money on your accommodations could help you be able to pay for a few more activities that you can do alone or with your significant other.
• Go on a day or weekend trip.  If simply being out of the home is enough to switch your brain into vacation mode, you don’t have to go far to have a good time.  In fact, you’re probably like most other people: you’ve gone to more attractions in other cities or towns than your own, so there’s plenty for you to discover locally.  You might even manage to pull off a trip on only one tank of gas!

No matter where you want to go, figure out which part of your trip is the most important for you.  If you really want to do a lot of activities, look for the cheapest flight and hotel available.  It might mean staying a little further away from your actual destination.  If pure relaxation is your goal, find a posh hotel that’s offering a good rate and just might provide everything you want right there in one location.  It’s scientifically proven that your brain needs recharge time, so don’t let the economy tell you that the only honorable thing to do right now is work, work, work and look for more ways to make money.  It’s possible to treat yourself and be frugal at the same time.

Both reverse mortgages and home equity lines of credit allow homeowners to tap into the equity of their homes in exchange for cash. However, these two loans work in very different ways, with different end results for the borrower.

Home Equity Loans and Lines of Credit

These types of loans allow homeowners to borrow money using their home as collateral, and can be taken out even if a home has already been mortgaged. With a home equity loan, the total amount that the homeowner borrows is advanced up front when the loan is taken out. The home equity line of credit, on the other hand, works in a fashion that is very similar to a credit card in that you have a maximum amount you can borrow, and have the option of choosing when you want to borrow the money.

As previously mentioned, both types of loans allow the homeowner to either exchange the equity in their home for cash. Most lenders will lend up to 75% of the homes appraised value, less the outstanding balance owed on the mortgage. For example, if your home is appraised at $250,000 and you owe $100,000 on your existing mortgage, you may be able to borrow $250,000 x 75% – $100,000, for a total of $87,000.

The way in which reverse mortgages and home equity lines of credit differ is in how interest is charged. The home equity loan interest rate is typically fixed and amortized for up to fifteen years. Alternatively, instead of a balloon payment the borrower can opt for a reduced amortization period that is due when the amortization period is over. The home equity line of credit interest rate is usually variable, rather than fixed, and has a typical draw period (the time in which the borrower can access funds) of between five and 25 years. When the draw period is over, the principal is paid either as a balloon payment or in accordance to an amortization schedule.

The main advantage of choosing a line of credit over an equity loan is that with the former, you only pay interest on the money you draw, rather than the entire sum that you can potentially borrow. However, with both types of loan, the borrower’s home is the collateral, meaning that defaulting on repayments could potentially lead to foreclosure.

Given that the loan is tied to their most valuable asset, a large number of borrowers choose to use home equity funds only for major expenses, such as college costs or medical expenses. Home equity lines of credit and home equity loans are also popular choices among homeowners looking to increase the value of their homes through remodeling.

Reverse Mortgages

A reverse mortgage also provides the borrower with the ability to tap into the equity of their home. The two biggest differences between reverse mortgages and home equity lines of credit are that there are no monthly repayments to make, and the loan does not have to be paid back until the borrower either passes away or sells their home. If either of these situations occurs, the house is sold and the proceeds are used to pay off the balance of the reverse mortgage.

Reverse mortgages are made available only to homeowners aged 62 years or older. There are virtually no other requirements and neither your credit rating nor your income affects your eligibility. For seniors, this is usually the easiest way of exchanging home equity for cash.

It is even possible for homeowners to obtain a reverse mortgage if they still owe a small amount of money on their conventional mortgage. However, should this situation occur, you are still required to pay the balance of your conventional mortgage.

Another advantage of the reverse mortgage is that you can choose how to have the money you borrow paid to you. You can choose to receive it as an up-front lump sum, as regular monthly payments, or as a credit card-style account where you draw money as you need it. In some cases you can even choose a combination of these options.

There are also some negative aspects associated with reverse mortgages that potential borrowers should be aware of.  First, reverse mortgages have high upfront costs. These upfront costs are typically between five and six percent of the underlying homes value. This is one of the reasons why the loans are so profitable to the lenders. Reverse mortgages are also subject to interest and finance charges, including loan origination fees. This means that the borrower either has to come up with cash to pay for these charges, or roll the finance costs into the mortgage. With the latter option, however, you end up paying interest on the finance charges from the beginning of the loan.

Another issue that can potentially turn into a problem is that associated property taxes and insurance are still payable by the owner of the property. And while you can’t lose your home, some reverse mortgages have conditions that stipulate that if the borrower defaults on their property taxes or insurance, the balance of the loan is due immediately.

Job unemployment has become an unfortunately common reality for many people today.  As of June 2009, the unemployment rate is sitting at 9.5%, with reports of 4.4 million people being unemployed for 27 weeks or more, according to the Bureau of Labor Statistics.  If you are one of these people, you’re obviously not alone, but knowing that probably doesn’t help you feel better, and sympathy certainly doesn’t pay the bills.  But you do need to try to remain positive, or at least focused on the future.  The best way to deal is not to let yourself become idle.

For many people, their job is closely tied with their identity and their sense of self-worth, so it can be difficult to adjust to the idea of no longer having that job.  Reality needs to be considered, though.  Do the positions in your field seem likely to open up and expand again after the recession?  If so, update your resume, hone your skills, and never stop looking for new job opportunities.  Right now, you do have a full-time job—looking for a job.

If it seems like your field may never recover, it might be time to consider a career change.  Is there something else you’ve always wanted to do?  Now can be the best time to go for it.  Or maybe there’s another field closely related to yours where your skills would be welcomed.  Try your job search using different position titles or job descriptions.

Of course, you need to analyze your financial situation.  Don’t hesitate to apply for unemployment assistance.  It can be a long process, so start soon and stay on top of it.  The amount your receive might not be much considering your previous income, but something is better than nothing.  If you have a savings account, you may have to dip into it in order to get by.  Be sure to figure out how long you can get by with your current finances.  As somber as it is, this may be a good motivator to continue your job search even when it seems bleak.

Finally, don’t let your emotions get the best of you.  A good way to keep up your self esteem and happiness level is to continue your hobbies.  Of course, you might have to give up expensive ones, but keep up with the ones you can.  Consider volunteering.  You’ll get a boost knowing you’re helping others, and you might even learn new skills for your resume or find a job connection.

And don’t underestimate the positive effects of exercise and keeping yourself healthy.  Exercise releases endorphins, kicks your metabolism into gear, and just makes you feel better overall.  You’ll need a positive outlook to survive this period, as well as to ace your next job interview.  It will come; be patient, and stay focused.  And don’t be afraid to ask for help.