Credit Counseling Leads to a Higher Net Worth

Jeanne McTaggartCredit Counseling

Life isn’t a game that ends with a lot of worthless things you can’t take with you, but having a high net worth is still important. Experts point out your net worth provides financial security in retirement. Whether you are in your 20s or 60s, you are never too young or too old to receive credit counseling. A trained credit counselor can help you get out of debt quicker and improve your credit score so you can eventually buy a home if you don’t own one already. Homeowners typically have a higher net worth than renters. According to a recent article by thefool.com, the average person’s net worth is too low to fund a long retirement. The article explains that your net worth is a financial snapshot that lets you know how much money you would have after paying off your debt and liquidating all your assets. Some people have more liabilities than assets, which translates into a negative net worth.

Eliminate your credit card debt

You can boost your net worth by reducing your debt or completely eliminating it. By enrolling in a Debt Management Plan, you watch your net worth steadily increase each month as your debt balance shrinks. When you receive credit counseling, you learn the steps to take to consolidate debt, lower your interest rates, become debt free and stay out of debt. Once you have no debt, you won’t have to subtract anything from the assets you own.

Learn to follow a budget

A credit counselor will work one-on-one with you to make sure you have the most realistic and helpful budget for your personal situation. Some of the important expenses to budget include housing, food, transportation and a debt payment. Rolling all of your credit card bills into one monthly payment makes your life easier to manage. In addition to the basics, set money aside for a retirement account.

Qualify for a home loan

Once you know the rules of the game, you can boost your credit score and save up for a down payment on a home if you aren’t already a homeowner. If you already own a home, you can qualify for a step-up house in the future. According to thefool.com, home equity makes up the greatest portion of the average American’s net worth. People in the 35 to 44 age category have a net worth of $35,000 if you include home equity but only $14,226 without the equity. People in the 45 to 54 age category have a net worth of about $84,000 including home equity and about $25,000 without the home equity.

Even if you are decades away from retiring, it’s important to work with a credit counselor to learn how you can get prepared. Experts say social security is just a safety net. If you are dealing with credit card debt in retirement or at any stage of your life, consider working on a Debt Management Plan. At Christian Credit Counselors, we negotiate with creditors to get our clients better interest rates.

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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