Debt continues to be a crushing burden for many Americans. From credit cards to auto loans, mortgages, student loans and medical bills, a high percentage of the nation’s households have one or more of those types of debt.

The average American household carrying credit card debt owed a balance of $15,654 in 2017, according to a NerdWallet debt analysis.

The average balance for a household with auto loans was $27,669. It was $46,597 for a student loan and $173,995 for the average remaining on a mortgage.

Debt is that great financial enemy we’d all love to defeat. People struggle to get out of debt because they don’t have a wise and coherent strategy to pay it down.

Getting out from under a mountain of debt can be a challenge, but a consistent plan founded upon discipline can open a path toward financial freedom.

Here’s how:

• First, build your savings. Trying to make higher payments to reduce your debt is admirable, but that doesn’t make sense without stashing away adequate savings for emergencies. You need at least three months of income, ideally six, in a liquid savings account to create a safety cushion. If you possess no cash reserves, what happens when you experience an unexpected cash-flow crunch?
• Next, restructure your loans. Minimizing your payments and maximizing your cash flow are the main goals. You can restructure your loans by rolling short-term, high-interest loans into long-term, low-interest, tax-deductible loans. If you have enough home equity, you can refinance your mortgage, which can be a tax-deductible loan, and roll as many of your non-deductible loans into it as possible.
• Attack one loan at a time. Although most financial advisors suggest paying off your loans with the highest interest rates first, ignore the interest rate and use a technique my team and I developed called the Cash Flow Index. Divide the loan balance by the minimum monthly payment. That gives you the Cash Flow Index for each loan. A low cash flow index of between 0 and 50 is a priority to pay off, because the idea is to free up more monthly cash.
• Be cautious about locking money in an asset. Paying extra on your mortgage can make sense when you’re financially stable, but other times it’s just locking money into a hard-to-access equity. A good rule is to put extra money only into debt where your minimum payment goes down as your balance goes down, such as your credit card.

The big picture purpose in paying off debt is to free up cash that you can then use to invest in passive-income vehicles. The best place to start is to maximize the efficiency
of your existing resources.

You may discover, as most people do, that you actually have a lot more to work with than you think.

Garrett B. Gunderson is the founder and chief wealth architect of Wealth Factory, an Inc. 500 financial firm. He also is the co-author, with Nik Halik, of "5 Day Weekend: Freedom To Make Your Life And Work Rich With Purpose" (www.5dayweekend.com), a Forbes contributor, and the author of the New York Times bestseller "Killing Sacred Cows: Overcoming the Financial Myths That Are Destroying Your Prosperity."

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