We finish our series on finances by looking at debt. I’m among the group of people that view debt as a necessary evil. Not many people can even dream of paying for a house in cash. The ability to borrow can be a safety valve in times of need. But it’s never a good thing, a desirable thing.

The temptation is to use debt to live beyond your means. Why wait to save up for that vacation when you can just put it on the card? Why save for a car when loans are so easy to get? Why sacrifice to save for college and live frugally while in college when student loans can cover the bills?

Every debt weighs down your flexibility in the future. You mortgage future possibilities for present benefits.

So, what do you do?

To start, you need to know where you stand. List all of your debts, balance, term, interest rate, and monthly payment. There are two ways to go after your debt. Option one: start with the smallest debt and pay as much as possible toward it (after paying the minimum payment on everything else). Once that’s paid off, move on to the next one until all are gone. Option two: use the same basic method, starting with the debt with the highest interest rate.

What not to do: Don’t use a debt reduction firm that charges you for their service. If you need help, try www.debtadvice.org. They won’t offer to make your debt disappear, but they can offer strategies to pay it off. Also, be very careful about consolidating debt. Consolidation can take different forms in practice. You might refinance your house, taking money out to pay off credit card debt. Or you might transfer the balance on a credit card to a new card with a lower interest rate. Consolidation doesn’t pay off debt. It may lower the rate and lengthen the term — both of which would lower the monthly payment, but you could end up owing more 0r even putting your house at risk.

It may take a while to get out of debt, but the only method that really works is to put every available dollar to debt until the debt is gone.