Here's a piece of news that comes under the "glass is half-full" headline: Households are reducing their debt burdens.

The Federal Reserve's second-quarter 2011 survey shows that total consumer indebtedness was $11.4 trillion as of June 30, 2011. That's down 8.6 percent, or $1.08 trillion, from its peak in the third quarter of 2008. Most of the improvement came from lower household mortgage balances and home equity lines of credit.

Now, the glass is only half-full because only some of the gain came from budgeting, scrimping and targeting extra cash toward debt. Many loans have been written off, and far too many people are struggling with steep debts burdens. Nevertheless, any change for better is heartening.

We've been getting more and more questions from homeowners about the financial wisdom of accelerating their mortgage payments.

Living in a home without a mortgage gives people a financial cushion to absorb a job loss or some other setback. It also lets people shift to a job that pays less but offers greater emotional rewards. People can earn a higher rate of return on their money by targeting the mortgage than they can make siphoning money into a bank savings account. Homeowners should enter their retirement years without debt.

Still, I am wary of the practice despite these compelling arguments. For one thing, people are putting more of their savings into a single asset located where you also make a living. It's a lot of financial exposure to one area. The big advantage of people putting the extra money into savings and investments is that they're building a well-diversified portfolio.

How to decide? Here are four questions to think through:

First, is the home where you want to keep on living as you age? Second, how secure is your job? Third, do you have any major expenses coming you should plan for?

Fourth, if there were an unexpected setback to your circumstances, is your margin of financial safety healthy enough to withstand the blow?

In these tumultuous times I lean toward emphasizing saving and investing outside the home. The cash portion of a healthy savings account isn't only an emergency fund. It's also an "opportunity fund" that lets you take advantage of intriguing developments that come your way. I would speed up mortgage payments once the home has shrunk in importance to your overall financial situation.

Chris Farrell is economics editor for "Marketplace Money." Send your questions to cfarrell@mpr.org.