How to separate the good debt advice from the bad? It’s a great question because there are so many pitfalls that one can fall into.

If you mention to your friends and family that you want to get out of debt, you’ll probably get a lot of financial advice from them, whether you ask for it or not. It’s human nature to want to tell other people what to do, especially if it’s something we have experience with.

But the question you must constantly ask yourself is whether that debt advice is sound? Different people use different strategies for dealing with debt, some better than others.

Here are some bits of debt advice that you should NOT listento. These are the sorts of advice that will most often be offered by people who themselves have very little wealth.

• Get a debt consolidation loan!
  It sounds like a good idea, rolling all of your outstanding balances into one loan and thus making one payment a month instead of five (or 10, or 15...).

  The problem is, there are usually fees involved in acquiring an additional loan. Furthermore, you wind up with one interest rate that might be lower than what you were paying on some loans, but higher than what you were paying on others.

  Most importantly, you need to understand that you cannot borrow your way out of debt. It’s better just to line up your debt and begin tackling them one by one. Pay off the lowest balance first, then apply the amount to the next debt until it is paid off, and so on.

  The momentum you will gain doing it this way helps to fuel your ambition for becoming debt free. So it’s best to keep the loans separate and pay them off individually.

• Pay off the highest-balance debt first.
  The logic here is that since the largest balance is racking up the most finance charges, you should pay it off first. Trouble is, it could take YEARS to pay this off -- and in the meantime, while you focus on this one, your other balances are piling up.

  No, it’s better to go in the opposite order: Attack your lowest balance first, pay it off as fast as you can, then move on to the next lowest, and so forth. That way, you’re giving yourself many small victories along the way, and eliminating entire accounts as you go. We call this “The Big Mo” approach, meaning - MOmentum and MOre MOney!

• Pay for debt counseling!
  This debt advice is perhaps the most disheartening. Most debt counseling agencies are scams who just want your money. They charge fees that you can’t afford, and they don’t really do much to help you.

  Often, their procedures completely ruin your credit (they claim they’ll repair it when it’s over, but that’s a deception), and they may not actually stop the collection agencies from calling you.

  Keep in mind that a debt counseling agency can’t do anything for you that you cannot achieve on your own with just a little research, so you’re your money.

The best debt advice you’ll get is the simplest: Reduce your expenses, increase your income, and pay your debts off as quickly as possible.

When you’re done, don’t acquire any new credit accounts. Your goal should be to eliminate debt permanently, not just for now.

You can live your life without any credit cards whatsoever. Millions of people do it, and they love the freedom and independence that comes from not being beholden to any creditors.

» Debt Counseling Service - You May Not Need A Pro
A debt counseling service may be helpful if you are completely stressed out and overwhelmed by the thought of your existing debt situation. If you can follow a basic plan, however, counseling may be overkill.

» Debt Free Financial Advice - Don’t Pay Money To Pay Off Debt!
Debt free financial advice does not have to cost you an arm and a leg. Many best practice suggestions can be found at no charge on sites like ours.

» Debt Free Personal Finance - Say No To Debt, and Yes To Life!
Debt free personal finance is a way of life for more people who are finally realizing the destructive forces that debt brings into their lives. Say no to debt, and yes to life!

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