Proven financial strategies to get out of debt

Spending few hours to review your financial goals and current conditions can pay hefty dividends at the end. Periodically you need to revisit your goals and make changes if needed.

Pay off or lower your non-deductible, high interest debt first. Most of the credit card debt is not deductible on your tax return and carry a higher interest rate than any other debt. Simultaneously many of us carry a mortgage. If you are considering making an extra payment or adding few more dollars to your monthly mortgage payment, take a closer look at your options. Paying off non-deductible loan balances first will save you more in the long run. Once you pay off your high interest, non-deductible loan balances, try to stay away from using them again.

Paying one extra payment a year on your home mortgage will reduce your interest as well as shorten the time of your mortgage. This strategy can lower a 30-year mortgage down to 21 years.

Do not forget to maximize tax advantageous contributions to your retirement vehicles. Whether it is an IRA, 401(k) or 457 plans, your contributions can reduce your current tax burden and provide much needed funds at the time of your retirement.