YOUR MONEY-Strategies to cope with permanent debt

 (The writer is a Reuters contributor. The opinions expressed
are his own.)
    By Chris Taylor
    NEW YORK, May 30 (Reuters) - Most people think of debt as a
temporary condition: Something you accumulate early in life,
chip away at during prime earnings years, and say good riddance
to well before retirement.
    But what if your debt is permanent?
    Then you might feel like Annette Loos, a 57-year-old mom
from Kansas City, Missouri who has around $20,000 in student
debt that she pays a bit of every month. Even though she has a
good job as a project manager in the banking industry, her debt
from her college days just sticks around. 
    "I joke that it will be written on my gravestone, 'She is
still paying her student loans,' " says Loos, who earned her
degree in 1984. "It's depressing because it never seems to go
    Loos is not alone. A new study from Northwestern Mutual
shows that 14 percent of people surveyed expect that their debts
will last for the duration of their lives.
    Seen in that sense, debt takes on a darker hue. It is no
longer a useful tool that can help secure a college degree, or
buy a first home. Instead, life can start to feel like a
Dickensian "debtor's prison," waking and working just in order
to pay more interest.
    It is common knowledge that Americans are struggling under
the pressure of debt. In fact, in the first quarter of 2017,
total U.S. consumer debt reached $12.7 trillion, according to
the Federal Reserve Bank of New York. This new peak surpassed
the previous record reached back in 2008. Student loan debt
alone has now hit an astonishing $1.3 trillion.
    On a household level, Northwestern Mutual's new 2017
Planning and Progress Survey reveals the extreme degree of what
is taking place. The average dollar amount owed by those in
debt, excluding mortgages, totals a staggering $37,300. One in
10 people owe over $100,000. And 20 percent of people spend
between a quarter and a half of their entire income just on
servicing debt payments.
    But do not despair. There are strategies and tools to dig
out from the burden of debt:
    That is the one piece of advice Annette Loos would give her
younger self. "If I had to do it all over again, I would try to
hurry and pay it all right away," Loos says. 
    Once the debt has been accumulated and the interest starts
kicking in, the horse has left the barn. Do whatever you can to
reduce your initial amount - choose a more affordable college,
work part-time during the school year, or live with your folks
for a while.
    Separate out the different types of debt on your balance
sheet and figure out which ones you can live with and which you
    For example, a mortgage with interest fixed at a low rate
can reap big tax benefits by deducting the interest, and at the
same time paying down principal towards ownership of a
(hopefully) growing asset. That is not the type of debt you need
to be obsessed with paying down early, suggests Rebekah Barsch,
Northwestern Mutual's vice president of planning.
    But high-interest credit-card debt, or private educational
loans with steep rates which cannot be discharged in bankruptcy,
are another story altogether. This type of debt can trap you in
a cycle of never being able to catch up. Prioritize clearing
those debts first.
    That act alone will boost your mindset, Barsch notes. The
Northwestern Mutual survey found that 4 in 10 Americans with
debt called those bills a looming source of anxiety. But when
you figure out a way forward, "that anxiety drops," Barsch says,
even if the timeline for payoff still involves many years ahead.
    As part of that plan, do not assume you will be able to suck
equity out of your home with cash-out refinancing, advises
financial planner Scot Stark of Freeland, Maryland. Counting on
that kind of last ditch effort is exactly what trapped people
back when the last housing bubble burst. 
    An effective payoff plan involves minimizing current
spending, too. If not, you will never get ahead. 
    Yet 17 percent of Americans admit that making minimum
payments is exactly what they do every month, according to the
Northwestern Mutual survey. That is one way to guarantee
    "It's sad," says Loos about the years of repayments that lie
ahead. "But I'm not the only one."

 (Editing by Lauren Young and Diane Craft)