# Page 6: Avoid Debt like the Plague

When it comes to building wealth, staying out of debt should be a top priority. Debt costs you money in interest charges, prevents you from investing your cash, and saps your monthly cash flow.

Some key tips to avoid debt:

• Use credit cards responsibly: Only charge what you can pay off in full each month to avoid interest. Treat credit cards like debit cards.

• Avoid high-interest loans: Opt for 0% interest loans when possible and pay them off before the intro period ends. Otherwise, high interest rates will eat into your payments.

• Pay off existing debts aggressively: Target the debt with the highest interest rate first while making minimum payments on others. Focus all your extra cash on debt payoff.

• Limit big-ticket financing: Avoid loans for things that will decrease in value over time like cars and electronics. Save up and pay in cash whenever possible.

• Stay disciplined: Create a budget and stick to it. Limit lifestyle inflation that can force you to take on more debt. Resist the urge to spend money you don't actually have.

• Build an emergency fund: Aim for 3-6 months of living expenses saved to avoid relying on credit cards or loans during unexpected expenses.

• Improve your credit score: A good credit score qualifies you for the best interest rates when debt is unavoidable. You'll save thousands with even a slightly better APR.

Debt often seems easier in the short term, but the costs compound over years and decades - literally working against you on your journey to financial freedom.

Living debt-free to the greatest extent possible is one of the most powerful steps you can take to build real wealth. Start practicing these habits now and you'll be in a much stronger position to achieve financial independence down the road. So avoid debt like the plague - your future self will thank you!