If you're still saving for retirement, ask yourself whether you could earn more on the money than you're paying in interest. As Westerly, Rhode Island financial planner Malcolm A. Makin explains, "If I can borrow money at 6% and earn 8%, and I have plenty of cash flow to pay off that loan, I am golden."

High-interest debt doesn't pass that test - so get rid of it. The average standard credit card charges 16.7%, so a $5,000 balance would cost you more than $800 a year in interest.

With a mortgage, if you're far from retirement, the answer is equally clear. The cost of a 30-year fixed-rate mortgage is still a relatively low 8.3%, and the interest is tax deductible. Given that, there's little reason to prepay it.

In retirement, however, you'll tend to think about these decisions differently. The reason: cash flow. Once you've stopped receiving a salary, you'll need to figure out where you're going to get money to pay the bills. Many retirees find enormous peace of mind in getting rid of their largest monthly expense.

And repaying your mortgage opens up a potential source of cash: a reverse mortgage. With this loan, essentially a mirror image of a conventional home loan, the lender pays you. You must be 62 to qualify, and the older you are, the more you can borrow. The cash isn't taxed (it's considered loan proceeds) and the loan typically doesn't come due until you die, sell your home or stop lliving in it for 12 months. The drawbacks: high closing costs and the risk that you'll leave nothing for your heirs.

#6. How Do I Save For College Tuition And Retirement?
Any parent who's snuck a look at the $23,000 average annual cost of a private college knows that saving for your kid's education can get in the way of retirement planning.

When you can't find money for both, you may favor college savings. Don't do it. As David Rhine, director of family wealth planning at BDO Seidman in New York City, suggests, "Fill up your retirement bucket first," From loans to financial aid, there are plenty of ways to soften the cost of college. No one will award you a retirement scholarship. Even colleges recognize that retirement savings are sacrosanct; when determining aid eligibility, they don't expect you to tap your tax-sheltered retirement funds.

That said, don't neglect college planning altogether. While about 70% of students receive some sort of financial aid, according to the College Board, 60% of that assistance is in the form of loans, not grants. When you're scraping up money for college and retirement, you should stretch your dollars as much as possible by taking the following tax breaks.

* Custodial accounts. Once you set up what's commonly called an UGMA or UTMA in your child's name, you and your spouse can give up to $20,000 a year without triggering gift taxes. Until the child turns 14, the first $700 in income is tax-free; the next $700 is taxed at the child's rate; anything above that is taxed at your rate. Once the child is 14, all earnings are taxed at his or her rate (presumably lower than yours). The money can be used only for the child's direct benefit, however, and the child gets full control at age 18 or 21, depending on your state. Also, since it is in the child's name, it may reduce chances of getting financial aid.

* State-sponsored savings plans. The money you invest in these co-called 529 plans grows tax deferred until you withdraw it for college expenses, at which time it's taxed at the student's rate. While your state plan may offer additional benefits to residents, you don't need to invest locally; nearly half of the 41 state plans are open to out-of-state residents.

* Roth IRAs. While we're not suggesting that you endanger your own retirement, don't forget that you can make penalty-free withdrawals from Roth IRAs for education expenses.

#7. How Do I Get Started With A Small Amount Of Money?
If you're ready to invest but have only a small amount of cash, there's no reason to delay. Indeed, investing small sums of money on a regular basis, known as dollar-cost averaging, is a highly effective technique. Some terrific mutual funds allow you to open an account with an initial investment as small as $250.

What if you want individual stocks rather than funds? Consider a dividend-reinvestment program, or DRIP. More than 1,300 companies, from General Electric to Exxon Mobil, allow you to buy a single share (usually through a broker), plow any dividends into additional stock and make regular additional investments through automatic paycheck or bank account deductions. Some will even sell you the first share.