Debt can be good, allowing us to buy with leverage—which means using borrowed money to increase our purchasing power. Houses are a prime example of this, since most people would have a much harder time buying a home without mortgages, but it can also be very stressful and cumbersome if not managed correctly.

We will discuss instances where we may find ourselves engulfed in debt, with no clear path out. Although in the moment it may feel like there is no escape, given time and a clear objective, it is possible to push past the debt you have.

The most important thing is to understand your debt, so the first step is to list out all your debts so that you can get a clear picture of what you're working with. Now there are two main approaches to paying it off: the snowball approach or the avalanche method, but which works best depends on the person.

The avalanche method is the most efficient. It involves sorting your debt by interest rate and paying off the highest-interest debt first while maintaining minimum payments on all other debts. While this method is the most cost-effective, it is not for everyone since it’s easy to lose confidence and deviate from your plan.

Alternatively, the snowball approach involves sorting your debt by the amount owed. By targeting those lower debts, you'll be able to decrease the number of loans faster, which will keep your motivation and psychologically reward you more. But of course this method has some drawbacks, namely that it is less efficient, and you'll ultimately end up paying more in the long run.

Once you have chosen your approach of choice, you're then going to want to set up a budget that accounts for the extra expenditure. Remember, the faster we pay this off, the less we have to pay overall. This, of course, doesn't mean you put all of your money into paying off your debt; there is still room to treat yourself, but you will want to hold back a little bit more.

Now you're going to want to avoid more debt. Seems like common sense, right? This is much easier said than done since, of course, nothing stays perfect and things happen. For this, I recommend establishing an emergency fund to ensure that you don't have to take on more debt than you already have.

Finally, you're going to want to track your progress. Even though it may seem worrisome at first, over time you will see yourself get through this, and the further you move along, the more confidence you are going to have to pay off that debt and become debt-free.