When it's over, I hope this recession will be known as the time when America lost its devotion to debt.

In my last online discussion of the year, I was again reminded of the damage debt has done to so many families. So as I often do, I'm answering some leftover questions, this time all related to debt - either paying it down or celebrating its good riddance.

Q: My husband has been out of work for more than half of the year (not continually) and has taken jobs paying a lot less than his previous construction jobs. I've gone through our budget and found a few things to cut, but we still have a deficit of about $250 a month. We've been using our savings to pick up the slack each month, but I fear that soon will be gone. I'm 29 and contribute to my 401(k) just enough to get the employer match. Should I stop contributing until we get some stability? It's just hard for me to let go of that "free" employer match.

A: So many people have been indoctrinated that giving up "free money" is almost a sin. But with any financial decision - even one that involves free money - you have to weigh all the consequences. Typically I advise people to contribute to their employer-sponsored retirement plan if there is a match for what they put in. In better times, you should contribute enough to at least get the match.

However, if you don't have enough money to meet your basic living expenses, you can't afford to invest right now - even for retirement. When you invest, you place your money at risk.

It would be unwise to accept free money that you can't get to for years or without paying a hefty penalty for early withdrawal, then have to accumulate debt to pay your everyday expenses. So leave the company's money on the table and use your money to put food on your family's table. Until your husband gets steady employment, you should stop contributing to your retirement fund.

Q: My husband and I have less than $2,000 in credit card debt, which we are trying to pay off as quickly as we can. However, we only have a fraction of what we should have in our emergency fund. Given all the lay-offs that have been happening, it makes me nervous that we do not have more in our emergency fund. Should we concentrate on getting rid of the debt before building up the emergency fund?

A: You need to continue building up your emergency fund even while paying down debt. If you don't have an emergency stash, you'll end up just piling back on the credit card debt if things get bad. Aim to have at least three months of living expenses saved. Once you reach that milestone, if you are comfortable that your jobs are secure, stop building up the emergency fund and put all the extra money toward your $2,000 credit card debt.

Q: I know what I need to do to get out of debt. I've got the second job, I've got the budget. My problem is discipline. Well, 2009 is upon us, and the debt is still there. I need some mental advice to rearrange my thinking.

A: The hardest part of getting in shape financially is the mental part. You can have the best debt-reduction plan in the world but if you don't have the willpower to stick with it, you will fail.

Here's what I tell folks. Imagine the day you don't have to dodge the phone calls from creditors. Imagine the day when the mail is delivered and you're actually looking forward to going through the stacks of envelopes. Imagine doing the unimaginable, such as paying off your mortgage early. Make a list of the things you would rather be doing with your money than sending it off to a credit card issuer. Keep the list with you and pull it out and look at it whenever you are tempted to spend.

You have to believe that there's a better life for yourself than drowning in debt. Let what the future holds motivate you to stick to your debt-reduction plan.

Q: We just paid off our mortgage, 10 years after we bought our house. What's an appropriate way to celebrate? I really would like to celebrate, perhaps have a party - but knowing that times are tough for people, I don't want to make anyone feel bad.

A: It used to be people had mortgage-burning parties to commemorate their release from economic serfdom. It was a joyous occasion and not just for the homeowner hosting the party. Others unselfishly wanted to help the family celebrate.

Yes, it's a tough economy, but paying off your mortgage could serve as inspiration for others. So go ahead and have a party. Celebrate big time. You won't be showing off. You'll be showing people how it feels to be free.

Listen to Michelle Singletary discuss personal finance every Tuesday on NPR's "Day to Day". To hear her reports online go to www.npr.org Readers can write to her c/o The Washington Post, 1150 15th St., NW, Washington, D.C. 20071. Her e-mail address is singletarym@washpost.com Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.

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