Case Study on Al & Amy, married, late 40’s, 3 children.    Annual Household Income: $120,000  Mortgage:  $120,000  Car Loans: $30,000  Credit Card Debt: $5,000   Monthly Household Expenses: $10,000  Investments: $450,000.    If your financial situation is similar to the Al & Amy in the case study, your output (expenses and debt) is too high compared to your input (income). Recommendation would be to focus on reducing your debt.

Credit card interest rates are excessive so pay off your credit cards immediately. Start a new financial habit – avoid carrying a credit card balance. If you cannot afford it – you do not need it. Credit cards are nice to have in an emergency – but then pay off the balance every month. You will be amazed at how much money you will save by not paying credit card interest.

Then take the money that you do save by avoiding credit card interest and apply it to your mortgage. If you increase your mortgage payment by a few hundred dollars every month, you will shorten the life of the loan and the total interest paid.

If you receive an employer match in your 401k plan, you are receiving a bonus in free money; so invest as much as possibly can into those 401k accounts. Remember your children can get loans and grants for college – but you cannot get a loan for retirement.