Use your mortgage as a financial tool to get ahead.
You get a mortgage tax write off that enables you to improve your cash flow. By changing your with-holding at work you can increase your cash flow right away. You can start bringing home more money on your next pay check which you can use to your benefit. Only change your withholding to the point where you can bring home more money but make sure you are still holding enough money back to cover your tax liability.
You may be used to getting some money back every year at tax time. Maybe you used that money in the past for a nice weekend trip or to buy something you really wanted. But you may be costing yourself a small fortune by doing that.
Today can become tomorrow much faster than you think it will
If you have credit card debt and you don’t pay it off at the end of the month you could end up paying on the same debt for months or even years. You could end up costing yourself many times the original amount you spent. Credit card debt is compounded interest that is working against you constantly. It’s time to make some changes and get it all under control.
Put that increased cash flow from the deduction to work for you and pay down your debt first and then to build a bigger retirement later. Look at your current debts and use the extra cash to start paying it down.
If you are carrying credit card debt your immediate need is most likely going to be to pay that debt down. You don’t get to write off personal consumer credit card interest anymore. Unfortunately that deduction no longer exists. And the rates on this debt usually range from 14% to over 28%. This is an area where that newly freed up cash can go to work for you.
One step at a time
Once your other debt is out of the way you should talk to your financial professional and determine if the money is better used beefing up your retirement or paying down the mortgage.
Both the market and the economy are fluid and constantly changing which makes it very difficult to determine how to build your retirement. You want someone that is experienced in retirement planning to look at your plan at that point and show you why they suggest the path they do. Don;t skip this step and just assume that your retirement is going to be fine.
Strategy is everything so get the advice of a professional when determining what to do after you have disposed of your non mortgage debt.
Make sure you see a financial professional if you’re going to make major changes to the way you handle your debt and finances. There’s a reason they are considered professionals.
