Debt is closely tied to savings - the more you do the first, the less you have left over for the latter. Conversely, the more savings you have, the less you (usually) need or want to borrow. Since you're paying out interest by borrowing, and (in some cases) simultaneously not getting interest by saving instead, you get a double financial whammy.

For example, instead of borrowing money by using your credit card, you could save that same amount every month until you had enough to buy the item you used the credit card to purchase. Only you can decide whether having the item today is worth paying the extra amount of money it cost in interest to own it.

But when it goes beyond individual items, into the realm of saving for retirement, you have a bigger issue to consider. An IRA (Individual Retirement Account) allows you to set aside money for your later years. That has multiple benefits and a few risks.

The money you save in an IRA is a tax deduction, so there are tax benefits. Also, as you save money you benefit from compounding interest on your savings. A look at an online calculator will give you a good idea of how your savings can grow as interest compounds.

The tax benefit is that you are not taxed on the money until the future when you use it. Normally your tax rate will be much lower and you will pay less taxes on the money than if it was taxed at the time you earned it. This is not true in every case, but with the majority of people it has proven to be the case.

There are many IRA options available today and the system has evolved a bit in recent years. But the basic principle is the same ??" up to $2,000 per year deposited into an account tax free.

One new option is the Roth IRA. It has some flexibility in that if you are 59+ years of age and have had your account for at least 5 years you can make tax free withdrawals from your account. Also money can be drawn if you are purchasing your first home.

Another common savings instrument is the 401k, named after a provision in the 1978 Internal Revenue Code. These allow employers to put money that is tax-deferred into an account on the employees behalf. You pay no income tax on the money until it is withdrawn.