Credit card bills. Car payments. Bank loans. Rent or mortgage payments. At times, it may feel like most of our money goes toward paying off debts. But, while it may seem like debt is just part of being an adult, it doesn't have to be that way.

By managing our money, living within our means and saving for purchases rather than putting them on credit, we not only can pay off some debt, but we won’t be relying so heavily on borrowing.

Keep in mind, though, that some forms of debt, such as a home mortgage, are better than others. Not only do most homes increase in value over time, the interest paid on a home loan may be tax deductible—saving you money on your taxes. Another type of "better" debt can be a student loan. In general, workers with more education usually earn higher wages, so a student loan can have a long-term financial payoff.

The type of debt you want to avoid is consumer debt—credit cards, auto loans, and department store cards. Items purchased with this type of debt don't increase in value, and the interest rates you pay can be quite high. Plus, there’s no tax benefit for interest paid on consumer loans.

There may be times when consumer debt is unavoidable—for example, few people have enough cash to buy a car without a loan. But falling too deeply into consumer debt is one of the biggest mistakes people can make.

Many people carry large balances on several credit and department store cards while they are also paying off large auto loans. These expensive, multiple debts drain their financial resources and jeopardize their financial future.

So, how do you avoid falling into the consumer debt trap? Here are some tips to help you find out.

Also take a look at the Using Credit Wisely section of this site.

Managing Your Money: Debt (It Doesn't Have to Be a Way of Life)

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