Stage 1: In Debt

One thing to know about this stage is that when we use the term "In debt" we are not referring to all debt, we are referring to what we call "Bad Debt". Bad debt is loans with often high interest or no debt not tied to an appreciating asset. Credit cards, student loans, Car loans and Afterpay can all be forms of Bad debt.

Your goal in this stage is to pay down all forms of bad debt and reach stage 2: Debt free.

During this stage the main priority is to pay down that bad debt as fast as possible. By tracking your spending and following a budget you can put your spare cash towards that debt until its gone.