From paying off debt to retirement planning, here’s how to set financial

Determining the best way to ensure your financial security can seem overwhelming.

For James and Michelle Bethe, deciding what to do with the $200,000 they had in savings had them at a standstill. As a teacher, Michelle, 36, has a pension for retirement and James, 38, has some money in a 401(k) plan.

For Michelle, the money is best kept in the bank for emergencies. James, however, wanted to get rid of their car payments and pay down some of their mortgage.

“The ultimate peace of mind is to be financially free,” said James, who lives in East Brunswick, New Jersey with his wife.

Their solution came in the form of a verdict on CNBC’s “Money Court,” rendered by O’Shares ETFs chairman Kevin O’Leary.

He decided they should put $130,000 towards their mortgage and pay off the $20,000 remaining on the auto loan. The rest was left for savings. To begin investing, he suggested the Bethes automatically start putting $100 a week into an index fund.

Yet everyone’s situation is different.

In general, it’s best to take a balanced approach — paying off some debt while still saving, said Cathy Curtis, founder and CEO of Oakland, California- based Curtis Financial Planning.

High-interest credit cards should be the first thing you get rid of, said Curtis, a certified financial planner and a member of the CNBC Financial Advisor Council.

However, she wouldn’t necessarily hasten the paydown of student loans, especially if they are government loans. Instead, just make sure you pay the bills on time.

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Curtis doesn’t generally like car loans, since autos are a depreciating asset. Yet interest rates have been low, so simply keep making payments on time. If you get a bonus or have extra money, pay it off.

“Prioritize paying down the car loan, but not before saving,” she said.

In general, Curtis doesn’t recommend paying down mortgages, unless you are nearing retirement, since interest rates are really low. If you don’t have a low rate, consider refinancing.

Contribute to a 401(k) plan or 403(b), if it is available to you, Curtis said. It should be enough to get the employer match.

Then, she advises taking the rest of your retirement savings allocation and putting it into a Roth IRA, if your income qualifies (income limits can be found here).

You can withdraw contributions penalty-free at any time, like if you need a down payment for a house.

If you have a 401(k), don’t qualify for a Roth and have multiple savings goals, open an investment account, Curtis said. She recommends investing through regular deployments, known as dollar-cost averaging, rather than lump sum.

Of course, if you can max out your 401(k), do…