I Pinged this Kiplinger true/false quiz a couple of days ago, but it’s such a good one that I thought I’d put the questions/answers on my blog.

Question 1 : You should get out of debt before you start investing.

False is correct. The principle is a good one, but taking an all-or-nothing leap isn’t realistic. Paying off all your debt – student loans, mortgage, etc. – before you start investing for retirement will force you to miss out on years of compounding returns. A better rule: Pay down high-interest debt first. After all, it makes no sense to invest your money at, say, an 8% annual return when you’re paying 18% interest on your credit card.

To see the entire quiz: http://content.kiplinger.com/quiz/truth_bunk_2/index.html?qid=33

We always discuss this in our workshops. Start saving NOW (even a nominal amount) and continue paying off those high interest cards. As you pay off one card, reallocate the funds spent on that one to the next card. Eventually, you reallocate all the money you were paying to your credit cards to your savings account. http://MoneyAwarenessProgram.com