The Stratagem’s Impediment:
Welcome fellow Villainous Co-conspirators, for stumbling into The Stratagem; now, today, I’m going to share a predicament that I, The Stratagem’s creator, am facing right now… this burden hinders all people from all walks of life — heroes, villains, anti-heroes, anti-villains, and civilians alike. It is one of the main foundations for any pursuit. This crippling burden I’m speaking of is called, Personal Debt—a significant amount, and if you think heroes are the only ones to throw a wrench in your plans, you are sadly incorrect.
Do you have any idea why Personal Debt is a far more devastating force to deal with than any other living and conceptual adversary? Imagine this: you have constructed the perfect plan, a plan so diabolical that it could turn the tides to your favor, and all you need to ensure its construction is possible is money. Every fictional villain tends to steal from banks and incredibly wealthy individuals. If operations, tools, gadgets, and personnel could function on hopes and dreams, or fear and anxiety, what then? No, no, no, money isn’t just a symbol of one’s avarice and greed; it is a tool for fair exchange since gadgets, keeping the Stratagem running, and paying for good help takes money. This is how any business functions.
We need to make sure that every dollar we owe to Personal Debt returns to us for our own personal use. I personally hate debt, especially debt that hinders the individual’s progress, growth, pursuits, and opportunities. Imagine what it would be like to be free from debt, no longer owing money to financial institutions because of an emergency or surprise expense that you didn’t have cash on hand. You could return to your plans of crafting the life you want to be proud of. In the following paragraphs, I’ll share with you what I’ve been doing to eradicate my personal debt, the resources I’ve been learning and from using, and the progress made since taking on this challenge.
Have You Acknowledged That Something Is Wrong With This Picture?
During my journey into financial literacy books, videos, and other resources, the one thing that we need to start with in destroying Personal Debt is to acknowledge it— Acknowledge that there’s a limitation preventing you from achieving your goals and halting your plans. My favorite resource to watch that shows what happens when people ignore their debts, who keep racking up new debt onto existing debt, and thinking it’ll magically sort itself out is from a Netflix show called, “How to Get Rich.” If you’ve ever read the book, “I Will Teach You to be Rich” by Ramit Sethi, or watched his YouTube channel by the same name, he has had guests on this show do just that: ignore their debts.
I think that ignoring your debts is a horrible tactic and it widens the gap between becoming free from it and remaining its hostage. The best financial resources I’ve come across that’s helped me improve my financial literacy and competency(in no way am I affiliated with these resources) are:
- I Will Teach You to be Rich: The books, journal, and YouTube channel by Ramit Sethi.
- The Psychology of Money by Morgan Housel.
- The Richest Man in Babylon by George S. Clason (audiobook Narrated by Grover Gardner).
- Alux.com YouTube channel and app.
I had improved with how I use the money that I earn, saved, and invested from jobs that let me hide among the masses. These had been the best resources I could find that helps people who don’t have a business or are not self-employed make the most of what they have. I am not affiliated with these people, just a fan of their work, which has helped me see with more clarity than before. Now, let’s move on to how I’ve been tackling my Personal Debt of $17,000.
The Stratagem’s Aggressive Payoff Strategy:
How I started to tackle my Personal Debt was to write down how much I owed and what each of my debts APR(Annual Percentage Rate) for each debts (which includes interest rates and fees) and displaying them prominently. For myself, I have a white board on my desk, so I wrote the numbers down.
- Short-term debt: $5,000
- Medium-term Debt: $12,000
The first thing that I decided to do was to put a stop to using my short term debt. I had paid off all other balances using a loan. I didn’t want to spread my money too thin again. Putting your physical and other means of accruing debt away to not use will take willpower to not swipe and increase your debt. Instead, I changed to using a cash envelope system.
If you’re unfamiliar with what the Cash Envelope System is, it’s where you take out cash each month to pay for your necessities, groceries, gas, and fun activities or things you want to buy on a budget. Using this system will give you pause where you would have to ask yourself: 1)what can I get with X amount of dollars in my hand? 2)am I buying X because I need it or because I want it? These are the few questions I ask myself when I go shopping and I withdraw between $200-$300/week to spend. How I separate the money each week, especially more than $200, let’s use $300 as easy math:
- $200 for groceries.
- $40 for gas
- $20 put away for, as Ramit Sethi coined it, “Guilt Free Spending”.
- $20 put aside for funding this blog.
- $20 for whatever cause I will financially support once I reach $100-$200 milestone.
The second thing that I decided to do was to get a part-time job; this was a personal choice because my full-time job had our hours cut and my paycheck shrank as well. I went job hunting for 1 month looking on Indeed and applying on the company’s job board before getting hired at a rage room part-time. The extra money, even though I had to adapt to extra workload, had helped with making sure my bills were paid. I’m not beneath working 2 jobs, though I am fortunate that both jobs were flexible and worked with me, no one should not feel ashamed for making such a decision.
Having 2 jobs, though draining, had given me the freedom to use an aggressive pay off method called, The Avalanche Debt Payoff Method. What this means is that you are paying more than the minimum payment towards the debt that has the highest APR. When looking at this from a mathematical perspective, tackling the debt with the highest APR also reduces the amount of interest that could be added on to the existing debt.
Even though my highest debt is $12,000.00, it would not make mathematical sense if I paid this off first. When using the Avalanche Debt Payoff Method, getting rid of the debt that will accumulate interest fastest will free up more money in the long run. By ensuring that I pay the minimum payment towards my other loan, I’ll be shrinking that loan with less penalties. I’ve been saving as much as $1,000.00 to put towards my credit card debt to pay it down faster. The more money you can put towards it, the faster this burden will be gone.
A Less Aggressive Option is Available
I chose the Avalanche Debt Payoff Method because I could pay off my debt aggressively. Thanks to working a full-time job and a part-time job, this option is mathematically sound for my situation. However, for those who aren’t able to use the Avalanche Debt Payoff Method, a less aggressive method is available: The Snowball Debt Payoff Method is used to pay off the smallest debt balance off first and work up towards the highest balance.
For example, if my $17,000.00 debt were spread across 4 different accounts, using this hypothetical debt to explain this payoff method, you would start by paying off the lowest balance. Then you’d move up to the next balance, until you pay off the next balance, and you focus on the last debt.
From personal experience, using the Avalanche Debt Payoff Method can feel mentally taxing—you’re seeing a lot of money move from your bank account to pay towards your debt and it can feel as though you’re not making a dent. I’ve thought of many scenarios of what I could be doing, instead of paying off my debts. I could be using that money to:
- Donate to either a food bank, the blood bank, a school that needs school supplies, to a local library, or a farmer’s market.
- Buy a nice lunch for my family once a month.
- Repay my parents money I had borrowed from them for an event I chose to attend last minute.
These are the things I would do once my debts are paid off. Remember that everyone is facing different challenges and has their own goals. These are mine and I will see them fulfilled.
This payoff method offers a plethora of benefits that its aggressive counterpart would not. The less aggressive method grants:
- Bursts of dopamine from eliminating small debts and seeing each debt gone.
- A sense of accomplishment.
- Provides an increase of strength to keep pushing through their (financial) challenges.
This method could also help individuals who are:
- Working one job.
- Earn under $50,000/annual salary.
- Taking care of children, elderly or sick family members.
For anyone who is already overwhelmed by their debt and other responsibilities, this could offer a sense of accomplishment and as though their situation has hope, instead of seeing it as hopeless.
Plans Need An End Date
Regardless of the method you choose to use to pay off your debts, you will need to have an end date for when you will become debt free. Why? Because it gives you something tangible to strive for than leaving it up to chance.
When I didn’t set a deadline to when I wanted to be debt-free, battling debt felt impossible in the beginning. Not having a deadline drops you into the someday category, the same as how New Year’s Resolutions are: I’ll someday get to travel, or I’ll someday get healthier, or I’ll someday get myself out of debt. NO! Someday, without a goal and a when to strive for, is a wish, not a strategy.
Go ahead and try it; keep paying your debts without a deadline and see how it feels, then set one. Share how much of a mental shift it is once you’ve tried this out yourself.
Treat your empire the same as eliminating debt—have a concrete date for when you want to start building your empire, instead of letting it become a someday wish. Otherwise, you will likely be at the mercy of life and nothing will change for you because you followed the same strategies you’ve always followed. We’re not simply Dreamers, Fellow Co-conspirators. We are Dreamers who plans, takes responsibility, and executes on our plans. Now, let’s move on.
What Happens If You Choose Neither Method?
If you choose neither method to tackle your debt—then the only thing that will happen would be a longer financial sentence. You need to choose which plan works for your situation and act on it, then you have enough sense to not remain debt’s prisoner.
You are the only one who gets to decide how to live your life, no one else, especially not some institution who cares about taking as much money from you as possible. That is what we’re here for—fighting for our financial freedom and get back to building our empire!
Charting Your Course to Financial Domination!
Understanding your enemy and the damages they can inflict on your rising empire is the first step towards victory. We’ve explored how devastating inaction can be and the immense power the strategies like the Avalanche and Snowball methods. Now, the choice is yours fellow co-conspirators.
No matter the battlefield you are fighting on, the time to act is now. What course of action are you taking and how you feel about the progress you’ve been making? Share in the comments a glimpse of your journey for other co-conspirators to learn and take inspiration from. Thank you for visiting The Stratagem’s Archives, now build your empire!
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I write about creativity, coding, art, and personal growth.
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