What's the difference between a regular IRA account and a Roth IRA? Can I have one of each?
Tax me now, or tax me later? That's the question.
With a regular IRA, you don't pay tax on your contribution now, but you have to pay tax on both principal and earnings when you start withdrawing.

• Pro: Pre-tax dollars contributed, so investment grows faster.
  Both principal and interest remain tax free until withdrawn.
  
• Con: Possible 10% penalty if you withdraw before age 59.
  Must stop contributing and start withdrawing at age 70.
  Withdrawals are fully taxable.

With a Roth IRA, you contribute with after-tax dollars. The investment grows tax free, and when you withdraw, only the earnings are taxable.

• Pro: More non-taxable income on withdrawal.
  No 10% penalty for withdrawing before 59 (after owning it for five years).
  Contributions can continue as long as there is employment income.
  No upper age limit for withdrawal.
  
• Con: After-tax dollars contributed, so no tax savings up front.
  High-income earners (160K jointly or 110K alone) cannot set up Roth IRAs.

You can own an IRA as well as a Roth IRA, but that doesn't mean you can save twice the money. The maximum contribution limit is the same for one as for both. Check with a financial advisor to see whether it makes more sense for you to contribute to one or the other or split your investment between the two.Should I borrow for my IRA?

If you can afford to pay off your loan in a year, borrowing for your IRA is a terrific idea. Here's how it works.

• Borrow to invest—get tax refund while investment starts growing.
• Use tax refund to pay off part of loan—reduce life of loan.
• Pay monthly installments—pay off loan early.
• Keep paying monthly installments, but to IRA—add to investment.
• Borrow same amount to invest again—bigger investment, bigger refund.
• Use bigger tax refund to pay off part of loan—reduce life of loan by more than last year.
• Pay monthly installments—pay off loan even earlier.
• Keep paying monthly installments, but to IRA—add more to investment.
  

Keep doing this and within a few years you won't have to borrow at all, and you will have established an IRA saving habit.

I don't have enough money to max out my registered plans as well as my kids' Education Savings Plan. Which one should I do?
When your kids are small, make your own retirement plans your priority. Your children have until age 30 to make use of a Coverdell Educational Savings Plan (formerly known as an Education IRA). But you can only make contributions until each child is 17, so it's a good idea to get started by the time they're five or six. Think of using the tax refund from your IRA for the kids' ESAs. The money isn't tax deductible (unfortunately) but the earnings grow tax free. You can contribute up to $2000 per year, but even if you can only put in a few dollars a month, that money has lots of time to grow.

If you have more money, consider a 529 Plan or College Bound Plan. These allow you to contribute annual lump sums of up to $11,000 for single people, or $22,000 for couples, with no gift tax. Again, these aren't tax deductible, but the investment grows tax free.

You might also gently nudge the doting grandparents, aunts and uncles to contribute to ESAs or 529 Plans in lieu of gifts. These are truly gifts that last.

How can I save when just living takes all the money I've got?
It's very tough when you're stretched to the limit. If your situation will probably change in a few years, you might be able to make up for not saving now. But if you think you'll be at this same level for some time, you really need to create a cushion for yourself. First, be very clear what is a want and what is a need. One of your needs is to save 10% of your earnings. If you can have that taken off your paycheque before your get it, you won't notice it so much. Allocate enough money to cover your needs, then plan what you want to do with the rest.

When you plan what to do with your discretionary income, you won't be as likely to let it slip through your hands. If there's hardly anything left, get creative. How can you have the same amount of fun for less money? There's usually a way if you put your mind to it.

Oh, and one more thing--no matter how tempting it might be, don't get into debt.

I'll be forced to retire in ten years, but I only have a few thousand put away. If I start saving like mad now, will I have enough?
How much is enough in retirement depends entirely on the individual. Use the Retirement Savings Calculator to determine your own Enough Number. You can see where you'll be if you save at different rates, retire earlier or later or adjust your projected retirement income up or down.

By all means, start saving like mad now. I've seen people turn their situations around in only eight years. You might not have enough, but at least you'll have something. You might need to look at working beyond your forced retirement so you can keep contributing to your retirement savings and give your money more time to grow.

While you're saving, remember to reward yourself along the way. Without a few treats, you may just give up.

We have a good relationship, except that we can't talk about money without getting into a fight. How do we come to some kind of agreement?
Without realizing it, people have deep-seated attitudes toward money. The four main types, Savers, Spenders, Builders and Givers have different financial approaches. If you're a Giver who needs to spend time and money taking care of other people and you're living with a Spender who needs to shop, there will be conflicts.

Neither attitude is right or wrong. It's important for you to identify your two basic money attitudes and allow room in your finances so that each of you can fulfill your need. Allocate an amount that the Giver can give and the Spender can spend each month.

Learn more about the different types by clicking on Attitude on the navigation bar. Or for more detail, read Chapter 1 in the book.

How can I get out of debt?
It's simple in theory: start spending less than you bring home. But in practice it's hard, especially in today's credit-crazed environment. What you need to do is separate your needs from your wants, then cover your needs and ignore your wants until you're out of debt.

I always ask my clients to keep track of every cent they spend for at least a month. Once they've done that, we analyze where their money is going. We set aside what to keep for their bottom-line needs, then decide which of their wants can be given up or postponed until the debt is paid. If you've never done this exercise, give it a try. You'll be surprised at how much money you might be spending on things that don't mean that much to you. The book has a whole chapter on this process, or you can go to the Retirement Savings Calculator and use the Cash Flow Statement as your guide. Just remember: record every purchase, no matter how small.

Pay off your highest-interest debts first, then move on to the next-highest. If you have a number of different debts, you may be able to consolidate them at a lower rate of interest than you're paying.

I also recommend the psychological trick of paying everything in cash instead of credit or debit cards when you're working on becoming debt free.

Encourage yourself with this thought: once you're out of debt, you get to keep all your money for yourself. Add up the interest you have paid and still have to pay and think of what you could have bought instead

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