1.

Avoid (and Pay Down) Debt

Debt is not necessarily bad in all instances, but it is something to be avoided most of
the time. For instance, student loans can be beneficial if the principal and interest rate
are not excessive and they help you pursue a lucrative career.

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“Some experts would contend that student loans are bad debt, but I disagree,” said
Robert Johnson, chairman and CEO at Economic Index Associates. “I would
categorize modest student loan debt as being ‘good debt.’ In my opinion, student
loans get a bad rap.”

Again, the emphasis is on how you use them. Student loans can certainly be bad if the
numbers don’t work in your favor. “There is no doubt that the system has been abused
and that some students have accumulated a mountain of debt and have earned degrees
that simply won’t provide the earning power to pay that debt back,” Johnson said.

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Johnson also emphasized that credit card debt is always bad debt and should be
prioritized over student loans. Ariel Acuña, founder of independent wealth
management firm LTG Capital LLC, recommended putting at least 20% of your
paycheck toward debt if you have it.