Just a few years ago, the residents of 'Debt Street' were in financial hot water, struggling to pay their bills and mortgages.

But with the help of a budget expert they took up the challenge to turn things around.

Australians love debt, and despite all the books, columns and financial counselors flooding us with advice, most of us can't escape the cycle.

• Bill buster bonanza
• Savings, savings, savings
• How to drive your dollar further

But there is a way out of the debt doldrums, as the six families from ‘Debt Street’ have proven.

When we first visited the families in 2008 they were up to their eyeballs in debt. With maxed out credit cards, out of control electricity, and grocery bills and mortgages they couldn't afford, the residents of ‘Debt Street’ were setting themselves up for financial failure.

But then came a visit from savings saviour, Fiona Lippey. The ‘queen of frugal’ was given the task of curbing each family's spending habits. “I really think we can save each family ten grand,” Lippey said at the time.

It was ambitious, but four months later when we returned there had been some savings success.

So have their financial habits changed for good?

With a new kitchen, an overseas holiday and savings to show, Michael Hart and his family have come a long way. Three years ago they couldn't have dreamed of any of it. “Since debt street we basically started shopping at ALDI, and we still do that today.”

Hart's family has saved $7000 so far, just on groceries, by following Lippey’s advice. The investment property that was dragging them down is now helping by being positively geared.

Reducing their credit card limit and cutting back on luxuries has saved Gordon and Judy thousands of dollars - enough to afford to renovate and travel overseas. It's also helped them survive the GFC and the rising cost of living. “We're in the process of planning a trip overseas next year to Canada,” Judy said.

Sandra and Jane have stuck to their savings guns in some areas but relapsed in others.

“By packing our lunches every day and not buying coffees we've been able to buy a $5000 bedroom setting,” Jane said.

Their cardinal sin is credit card debt. In 2008 they cut up all four cards in front of us, but couldn't do without them. Now they've got five.

“It's a shame they have kept their credit cards. It would have been much better if they'd swapped to debit cards, and it's even worse that they have more credit cards,” Lippey said.

Author of Debunking Economics Steve Keen also warns to beware of the credit card trap.

“Credit cards are useful because they give you instant access to spending power, but what you should want to do is pay the debt down back to zero again.”

Keen says with a second recession looming, it's not a good time to have debt, and instead of blaming ourselves or being frugal, really we should be fighting the banks.

“There should be rules that say the minimum credit card payment is enough to reduce your card to zero in some sensible length of time, but the banks don’t want you to do that,” he said.

As our financial fairy has shown however, Debt Street isn't all one way traffic. The six couples are on their way to financial freedom, but they have to keep going.