Wipe out Credit Card Debt, Fund Savings

July 9, 2010 – 12:19 am

People who are working to pay off credit card debt often dream about the things they may be able to buy once they have paid off their bills. But a good debt reduction plan doesn’t erase monthly payments just so you can go out and buy more stuff. Start planning ahead now to set up savings accounts to help you have a brighter financial future.

Emergency Savings

Everyone should have an emergency savings account. Even as you are working on your debt reduction plan it is a good idea to put aside some funds into an emergency savings. Having an extra $500 or $1,000 that can be used for unexpected medical expenses or car repairs can give you peace of mind. Once you pay off credit card debt you should aggressively work to build an emergency savings with six to nine months of your household expenses.

Retirement Savings

Too many seniors are struggling to make ends meet. Sticking with your debt management plan can put you on track to building a comfortable retirement savings.

A Roth IRA can allow you to grow your retirement savings. The Roth differs from traditional IRAs in that it is funded with after-tax dollars. That means that your earnings can grow tax-free. There are some income guidelines so talk with a financial advisor to determine if a Roth IRA is right for you.

Get Help with Debt

You may have other savings goals, such as being able to buy a home or send your kids to college. Do not hesistate to get debt help if necessary. Debt counseling can give you a strategy for paying off your bills so that you can ultimately reach your savings goals.

Beat Your Debt Today!