Personal debt is easy to accumulate and a lot harder to shed. Credit is widely available, expenses are a fact of life, and we all enjoy the occasional luxury. But if you want to achieve financial independence and empowerment, try to tackle your debt burden now.

Credit card debt and student loan debt are two very common kinds of debt. Of the two, credit card debt is more dangerous. Why? Because of interest rates. The average annual interest rate on credit cards in the US is ~17.5%.  Some top 30%. (By the way—does your credit card have a rewards program? You’re paying higher interest rates than you would without one.)

Do some basic interest rate math, and you’ll see how fast debt levels can spiral out of control.  Say you’ve got $1,000 unpaid on your credit card. At a 17.5% interest rate, that debt will grow to $1,175 by the end of one year. Maybe it doesn’t seem like a whole lot more—but remember, the interest itself accumulates. After two years, you’ll owe nearly $1,400; and at the end of five years, that original $1,000 in unpaid debt will have grown to $2,240.

Let’s run a few more numbers. At a “better” interest rate of 15%, your unpaid debt will still double in five years. If your interest rate is 20%, your debt will double in four years. At 30%, it will take less than three years to double.

These numbers are scary, but you can tackle them. It helps to prioritize. If you owe money on more than one credit card, find out how much each one charges in interest. The credit card with the highest interest rate is the one you should pay off first. Debt on this one will accumulate the fastest, even if you never use the card again. To avoid damaging your credit, make at least the minimum payment on the rest of your cards. Yes, more debt will accumulate on these cards, too, but not as quickly—so prioritize.

Student loan debt has a much lower interest rate than credit card debt. It’s also considered to be “good debt” because it creates value. That means, not only are you smarter when you exit college than when you started (we hope!), but your college degree should also allow you to get a better paying job than a high school diploma alone. For this reason, student debt is treated differently than credit card debt by credit rating agencies.

An average student borrower in the class of 2015 had around $35,000 in student debt[1]. The average starting salary for recent graduates is $43,000[2]. At those figures, paying off student debt represents a challenge for many young adults, as we know. But because of its lower interest rate, student loan debt is still better to have than credit card debt.

Let’s look at strategies to tackle personal debt. You can start by making a budget. The best way to do this is to record all the purchases you make in a month. At the end of the month, review and determine which costs were for necessities (rent, bills, transportation to and from work, food) and which were for luxuries.

Include in your calculation of bills (necessities) the minimum payments for all of your debt—including credit cards and student loans. Remember, even though you should prioritize repayment on the highest interest card first, you must make at least the minimum payment on each credit card each month.

Maybe you don’t have savings at this point in your financial planning. If you do, the next step concerns them. If your bills and other necessities per month total more than your monthly income, then you need your savings for living expenses. But if you don’t need your savings to supplement your income and cover your monthly bills, then I would strongly recommend you use at least part of your savings to pay down your debt.

The reason why is that the rate of return on savings—and even on any investments you might have—will
not earn you enough to compensate for the growing level of debt you accumulate, particularly on credit card debt. Most savings and checking accounts pay less than 1% interest per year. And even professional money managers like me have a difficult time consistently generating 15-30% returns for our investors over time. So, before you think about saving or investing, pay off your credit card debt. I know it seems counterintuitive, but over the long-term, it’s the better plan.

Tackling debt is hard. It will certainly require you to cut back spending. You might find you need to take on additional work, or sell some old stuff on eBay. You can think about creative and even fun ways to economize better and earn a bit more. The main point to keep in mind is that becoming debt-free will transform your financial future.

[1] http://www.ibtimes.com/student-debt-crisis-2016-new-graduates-owe-record-breaking-average-37000-loans-2365195

[2] New York Federal Reserve data released January 2016