After consolidating your debt, you will find you have extra money in your pocket at the end of the month. Instead of spending the money, there are some wise and prudent things you can do with excess funds. Maybe “wise” and “prudent” aren’t the most exciting ideas related to money, but the good news is that people who are responsible with their money end up having more that they can spend. Sometimes it’s difficult to admit that you can use debt counseling. Having debt isn’t a statement about your character, but it is a sign you need more reliable and honest personal finance tips and educational tools. By talking to the credit counselors at Christian Credit Counselors you can get started in the right direction. According to an article by Huffington Post, 22 percent of people surveyed by Wells Fargo said they would rather die than retire poor. Saving for retirement should be a high priority after receiving debt counseling to deal with overwhelming credit card debt or other unsecure debt.

Opening Multiple Retirement Accounts

Some people think they only need one retirement account, but in actuality there are benefits to having different kinds of retirement savings vehicles. The Roth IRA can provide you with tax-free money when you retire even though you don’t lower your taxable income now. Also, you can access any contributions you make. On the other hand, putting money into a 401(k) can lower your taxable income so you could get a better tax refund. If your company offers to match your 401(k) contributions, you definitely want to take advantage of the gift.

Taking advantage of the tax savers credit

If you have a low to moderate income, you could be eligible to receive a tax credit for contributions you made to any retirement account. The saver’s credit gives you back 10, 25 or 50 percent of what you contributed up to $2,000, depending on your income. According to an IRS article, eligible works can put money into an IRA account until April 15 for the prior year. With a 401(k), you have to get all your contributions in by the end of the year. The IRS site outlines who is eligible and any income requirements.

Saving up for unexpected expenses

When you talk to a trained credit counselor about your debt, you will most likely decide to enroll in a Debt Management Program. Once you learn what your monthly debt repayment will be, you can better budget for your usual expenses. If you can “pretend” that saving in an emergency fund is a bill, you are more likely to succeed. Another tip is to make the savings automatic by having money automatically deducted from your paycheck and put into a special savings account for emergencies.

After getting the debt counseling they need, many people turn their lives around. Instead of spending their time worrying about juggling different credit card bills, they look forward to juggling investment and retirement accounts.

Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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