January 2, 2015

Don’t be a Financial Saboteur

A lot of people unknowingly sabotage their future net worth or wealth. Having credit card and other debt at high interest rates can kill your financial future by keeping you trapped. People who are entering the workforce in their 20s or retired in their 70s, will find it’s never too soon or too late to get personal finance help through credit counseling. A certified credit counselor can work with your creditors to get them to agree to a lower interest rate. According to a piece by CBS Money Watch, one of the major mistakes people make is to focus only on the short term. With credit counseling, you can get the tools you need to plan for the future.

Being in the position to buy a home or car

People who have a lot of credit card debt often find it difficult to qualify for a mortgage. Renting instead of buying a home can decrease a person’s net worth over the long term since you build equity in a home that counts as an asset. The reason it’s important to reduce or completely eliminate credit card debt is because lenders use a debt-to-income ratio to qualify people for a home mortgage. By agreeing to a Debt Management Plan, you can repay all of your creditors quickly so you’ll be in a position to own instead of rent. It also helps your net worth when you buy a car instead of leasing it.

Having extra money to invest

According to CBS Money Watch, another way people sabotage their future net worth is by failing to pay into a retirement plan early in a career. Even older people who have earned income can take advantage of the Roth IRA. Older people can also make catch-up contributions to their retirement plans. Younger people can benefit from the power of compounded interest by starting early. A credit counselor can help you work out a budget that includes retirement savings as one of the “expenses” you have every month.

Cutting credit cards

With credit counseling, you learn to temporarily put your credit cards aside while you pay off your creditors with a debt repayment plan that’s manageable. Experts say some people over spend because they rely on credit cards. Even if your debt is a result of unexpected medical bills and unavoidable bills, you can make a new plan to save for the future. Using a debit card instead of credit cards can improve your net worth since you’ll have more in savings and little or no debt to take away from your net worth.

At Christian Credit Counselors, we provide credit counseling and debt consolidation help for people who want to work toward building wealth instead of accumulating debt.

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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