Here's my question: Credit card debt. I've heard two things: one, make minimum payments until I'm in a place (big promotion, lottery winnings) to pay it all off quickly. Two: don't do anything until I pay it down. No saving, no 401k, no vacations, no fun, no nothing. I've sort of been doing the second one, except for the whole not spending thing. But I definitely am not saving. Help?

Sheryl says: There are two answers: the mathematically correct answer, and the psychologically correct one. Mathematically, it makes sense to pay your debt down, because it's expensive. But it can be psychologically easier to split the difference — put a portion of money to your credit card, at least the minimum, more is better, but also put a little bit of money toward retirement or savings or cash reserves.

The reason a lot of us have credit card debt is because we didn't have cash reserves in an emergency. So even just $20 or $50 a month into a savings account adds up, and if something happens, you don't have to use your credit cards. And then, once there's a little bit of cash reserves, then you can consider really attacking the debt.

What's the best way to save for my son's college? Many of the savings calculators indicate putting loads away every year and he's 1 year old. I ran a quick scenario, and it suggested we save about $8,000 per year, assuming 7 percent rate of return. Should I use a 529?

For people with young children, I don't think you should use an educational savings vehicle. You gain a little bit of savings on your state income tax, but you lose the ability to use that money for other things that might come up. With a 1-year-old, I assume the parents are fairly young and need to build their own nest egg. So they should earmark a regular investment account for junior's college. Because if you don't end up needing that much for college, or you need the money for something else, it's there.

What kind of investment can get that 7% rate of return?

A diversified equity fund, like Vanguard Total Stock Market, is a place to go. With a 1-year-old child, you've got 17 years until college, so you can ride out the ups and downs of the stock market, and 7 percent is about what I'm expecting for the stock market over the next several years.

I think a lot of people (myself included) get so overwhelmed with how many bills they have, it's like, why bother saving at all? Credit card, student loans, rent, cellphone, car, Christmas... on and on. How can people start small? Can saving money be fun?

I don't know if saving money or being frugal will ever be a great fun thing to do. But it really feels good personally. Just like we go through our closets and purge stuff, and it's healthy to go through your expenditures and purge stuff. If you add up all the little costs you accumulate — features for your cell phone, additional cable — maybe it's only $5 a month, but find a few of them, and it's real money.

I'm curious as to whether there's a respected school of thought regarding severely staggered investment planning, i.e. none at all for the first part of your career. When I moved to NYC about seven years ago, I got a job with a low salary, and I opted not to set up a 401k at all. Friends told me that I was crazy, and I said that I expected to be making twice as much in a couple of years...and in fact, that is what happened (I still didn't set up a 401k, though). I guess what I'm saying is that most financial planning advice tends to be so conservative that, being someone who makes a lot of non-conservative choices, I'm a bit alienated by it. It would be nice to see a book titled "So You Don't Feel Like Saving Anything Right Now." It might start with a caveat that it's a risky strategy, but I think a lot of people would relate. What do you think?

Well, I'm not aware of any book that advocates that. But almost all Americans are not saving enough, have not saved enough, and will not save enough. So what's going to happen? At some point, they'll stop working, and they'll live off what they've got. Until about three generations ago, people retired at death, and there are still a lot of people who believe it isn't natural to retire. But sometimes we don't have control over that. What we do have control over is how much we save, and the earlier we start, the less we have to save. To most people, that sounds like a pretty good deal.

How do you still live your life and manage to save at the same time? I know bills should come first, but how do you live on a budget and still have a life?

No one can have everything they want. But money doesn't make a life — experiences do. One of my favorite books on this subject is "Your Money or Your Life." It's pretty radical, but if you take 10 percent of what's in that book, it really will change your life. I've read it a number of times, and each time I come away a little more focused on what's important to me. Also, when people don't have a lot to work with, they start making things. A home-made Valentine's Day card is so much more meaningful to me, because it came from the heart, and they did it from scratch. We get creative with our cooking, our entertaining — a deck of cards can go a long way.

I've been paying for a 20-year term life insurance plan since I was 18 (I got sick and my parents thought it was necessary) but I'm 26 now and am feeling fine. Every year, I think about getting rid of the plan and putting the $35 a month towards something else (probably savings). What's your thought on this? Stick with it or quit?

The issue is, does anyone depend on your income, other than you? If the answer is Yes, then you have to have coverage. If there's no significant other in the picture, you could drop the coverage, and if and when the circumstances change, try to get it again. But that is a gamble, because you could become uninsurable. Most of us won't, but any kind of serious illness can disqualify you, at least for a few years.

Before dropping the policy, I'd recommend shopping around. At $35, it might be more coverage than you need, or prices may have come down quite a bit. You might be able to keep the policy and save money.

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