Your January personal finance questions answered part 2

Boston.com Staff / February 15, 2013

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Pay off the highest rate loan first, then the second-highest rate, etc. Taking on loans for appreciating assets like your education and your house makes a lot of sense. Taking on loans for depreciating assets like cars isn’t a great idea.

Question: Is it smart to consolidate grad school and undergraduate loans into one, even though the loans came from different institutions?

Levenson: I am not familiar enough with student loans to answer your question. However, I’d start by contacting your lenders to see what type of consolidation deal they can offer you, if any.

Question: I have a large amount of student loans, and not the best personal income on the planet. My husband of almost one year does make a good income. I’m currently on the Income-based repayment plan, but am switching to the regular plan now that I’m married. Is there anything I can do to reduce my student loans?

Levenson: Pay them off as aggressively as you and your husband can stand to.

Question: Since tax time is here, my question is about finding ways to lower your tax obligation. I’m self-employed, married, file jointly and itemize deductions. My accountant says the only way to lower our tax is by increasing the amount we put toward retirement savings. Is this true?

Levenson: You could earn less…I think your accountant is right. The easiest single way to reduce your taxes is to contribute as much as possible to you and your husband’s retirement plans. If you give to charity...that would reduce your tax bill, too.

Debbie Levenson is a certified financial planner representing the Financial Planning Association of Massachusetts.