Q: I’m one of those people who for some reason got into debt. My wife and I have a combined income of $85,000 a year. We have about $20,000 saved in a money market and about $50,000 in my 401(k).

My problem is I have $50,000 in credit card debt. I owe $14,000 on one car and $15,000 on the other. I also have a boat that I owe 20,000 on. My mortgage balance is $180,000 and the house is worth about $230.000.

We are both 48 and starting to panic about retirement. Are we too far in debt to get out or is there hope? And if so what do I do?

A: Even at 48, you and your wife have plenty of resources to get rid of most of your debt and start to save for retirement.

Let’s look at your first problem: You and your wife are clearly living beyond your means. You have to figure out a way to stop spending more than you earn.

That might mean selling your boat (even if you have a small loss on it), trading your cars in for less expensive models, and doing all of the small, money-saving tricks like brown-bagging your lunch instead of buying it (saving $5 to $8 per lunch), eating in instead of out (saving $30-50 per meal) and making more food instead of eating take-out or convenience items.

Can you refinance your mortgage for a lower rate? You might be able to save more money by choosing a different loan program. A local lender can help you figure this out.

The next trick is to use some or all of your savings to start paying down your credit card debt.

You need to have some cash on hand, so I’d start by taking half of your savings ($10,000) and immediately make a large payment on your credit card. Be sure to pay down the balance with the highest interest-rate first. Next, look into taking out a home equity loan for another $20,000, which will at least get your credit card debt to a manageable level of $20,000.

To get that final $20,000 in debt paid off, you’ll have to pore over your budget to find all the cost-savings you can. All of the savings you can find should go toward paying off your credit card debts. You may even want to consider taking on a second job for a short-period of time and devote all of the income from that job toward paying off this debt.

Since retirement is a priority, I’m going to suggest you leave your 401(k) account alone. I’d much rather see you pay your debts out of non-retirement funds.

Once your debts are under control, you should consider putting the maximum into your 401(k) at work, and taking advantage of Roth IRAs with your after-tax cash. You and your spouse can each put away $3,000 into a Roth IRA, which should start to boost your retirement savings dramatically after just a few years.

For free or low-cost budgeting assistance, try Consumer Counseling Credit Services (www.cccsinc.org).

Good luck. I know this seems like a mountain you have to climb, but with a little bit of perseverance, I know you can get there.

Q: I made a couple of late payments on my credit card and my interest rate has jumped to about 21 percent. I really can’t afford to make more than the minimum payment due.

Are there any companies that you know of that I can transfer my balance to with a lower rate? I rarely use the card anymore because of the rate.

A: Your problem is that you’re paying late. When you pay late, even if you pay late only once, credit card companies assume you’re in financial trouble and are reluctant to extend credit to you. After all, if you can’t pay your bills on time, you must be strapped for cash, right?

Paying bills late is the piece of negative information you see most frequently on credit reports. It will often take a year of paying on time to get your credit score back to where it was before you paid late once.

I don’t know if you’ll be able to transfer your balance to a lower interest rate card. Whether you qualify depends on where you credit score is at this moment. You can check out your credit score for $12.95 at myFICO.com.

You can shop around for better credit card deals at www.cardweb.com. But whatever you do, don’t cancel your existing credit card. If you can switch the balance, that’s helpful. But canceling your card (even if you no longer carry a balance) could dent your credit score further.

If you need budgeting help, check out a good non-profit credit counseling organization like Consumer Credit Counseling Services (www.cccsinc.org).

Jan. 19, 2009.