What is obvious is that we are in the debt pit because we don’t maintain or have a spending strategy. So that implicates the fact that in order to emerge from this crater, we’re going to need some very specific and decisive choices and strategies to be implemented.

Experian makes a good point about debt, stating that not all debt is equal: a mortgage or student loan being paid ahead of schedule may not make as much sense if you’re not paying credit cards at a higher interest rate. Even more so if you have a student loan, the chances are that that loan may be forgiven if you’re working in public service.

So what falls into the category of bad debt? Well, according to Experian, car loans are bad debt.

Another strategy is to pay off the balances with the lowest balance, by placing all of your budgeted pay-off capital toward that one high-interest credit card or loan, while paying the minimum on the lower interest cards. By paying one off at a time, it becomes a concentrated deliberate effort. Experian says that the effect of the “small wins” keeps you engaged and motivated to continue to maintain the good healthy saving & spending disciplines.

Another good strategy is to have an emergency fund socked-away in order to cover any unexpected costs.