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High debt and misuse of credit cards make it tough to save for retirement. Money that goes to pay interest, late fees, and old bills is money that could earn money for retirement and other goals.

How much debt is too much debt?
Debt isn't necessarily bad, but too much debt is. Add up what you pay monthly in car loans, student loans, credit card and charge card loans, personal loans - everything but your mortgage. Divide that total by the money you bring home each month. The result is your "debt ratio." Try to keep that ratio to 10 percent or less. Total mortgage and non-mortgage debt should be no more than 36 percent of your take-home pay.

What's the difference between "good debt" and "bad debt"?
Yes, there is such a thing as "good debt." That's debt that can provide a financial pay off. Borrowing to buy or remodel a home, pay for a child's education, advance your own career skills, or buy a car for getting to work can provide long-term financial benefits.

"Bad debt" is when you borrow for things that don't provide financial benefits or that don't last as long as the loan. This includes borrowing for vacations, clothing, furniture, or dining out.

Do you have debt problems?
Here are some warning signs:

• Borrowing to pay off other loans.

• Creditors calling for "payment.

• Paying only the minimum on credit cards.

• Maxing out credit cards.

• Borrowing to pay regular bills.

• Being turned down for credit

Here are some two important things you can do today:

Avoid high-interest rate loans. Loan solicitations that come in the mail, pawning items for cash, or "payday" loans in which people write postdated checks to check-cashing services are usually extremely expensive.

For example, rolling over a payday loan every 2 weeks for a year can run up interest charges of over 600 percent! While the Truth-in-Lending Act requires lenders to disclose the cost of your loan expressed as an annual percentage rate (APR), it is up to you to read the fine print telling you exactly what the details of your loan and its costs are.

The key to recognizing just how expensive these loans can be is to focus on the total cost of the loan - principal and interest. Don't just look at the monthly payment, which may be small, but adds up over time.

Handle credit cards wisely. Credit cards can serve many useful purposes, but people often misuse them. Take, for example, the habit of making only the 2 percent minimum payment each month. On a $2,000 balance with a credit card charging 18 percent interest, it would take 30 years to pay off the amount owed. Then imagine how fast you would run up your debts if you did this with several credit cards at the same time. Here are some additional tips for handling credit cards wisely.

• Keep only one or two cards, not the usual eight or nine.

• Don't charge big-ticket items. Find less expensive loan alternatives.

• Shop around for the best interest rates, annual fees, service fees, and grace periods.

• Pay off the card each month, or at least pay more than the minimum.

• Still have problems? Leave the cards at home or cut them up.

Despite your best efforts, you may find yourself in severe debt. A credit counseling service can help you set up a plan to work with your creditors and reduce your debts.