A Roadmap to Financial Freedom VIII — Dealing With the Big Mistakes

The First Article in this Series is Available Here.

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In my last article, I covered the method of getting paid if you don’t have a PayPal account or an American bank account. This post, I’m returning to the core of our exploration into shutting down your debt monster. Within the first couple of posts, I covered your BMR and how to spot it. What I casually glossed over (that a lot of people spotted and called out on the Facebook group) was the long-term commitments that people have that are eating their money every month. These are the terrible financial decisions that hang around our necks like millstones. I had some of those myself when I was younger.

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Status is One Of Your Worst Enemies

According to Science Daily, we all want a high level of social status, whether we know it or not. When I was younger, living beyond my means was the norm. There were weeks when I’d have to borrow a hundred dollars from my sister to be able to travel to work. Status is a creeping killer because it puts you in all sorts of debt you’re really not cut out to handle. Because of the situation, you might take out a phone on installments, or even worse, cut into your savings to take yourself out (or your potential girlfriend) to a beautiful dinner. But status is something you get over as you get older. When you do, you find yourself up to your neck in debt and trying to figure out how you got this deep in it.

Loans, Credit Card Debt, and A Horrible Credit Score

When I decided to change my finances, I had to take a long look at all the dirty things I did to myself for status. I had a maxed-out credit card that was charging me interest to the tune of 25% of my debt. I had a postpaid phone that I hadn’t paid in over two years because I lost the phone with the sim card in it. Because of my failure to pay that bill, I now had lousy credit. As I learned later down, bad credit is a ghost that will haunt you for most of your adult life. Finally, I had paid off my loan (luckily, we only had to pay a minimal amount for college on the island), but I was already considering another loan. The first thing I did was sit myself down and tell myself that I didn’t need the loan. From there, I started to look at my options to paying off my debt incrementally.

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The Snowball Method

The first option that came to my attention was the Snowball method. In this method, the aim is to meet all your minimum payments on your debt. Then you start paying off as much as you can on the lowest value of debt to clear it. The idea is that once you clear that smallest loan, you move to the second smallest and use the minimum from that first debt along with your available payments to clear that one, and so on until you’re debt-free. Nerd Wallet states that this gives you a sense of satisfaction as you pay off your debts since, with each one you eliminate, you free up more money for the next one.

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The Avalanche Method

Another snow-based pun for paying off debt focuses on a different methodology. Just like the snowball method, the minimum payments on each of your debts get paid off. Then you select the debt with the highest interest rate and seek to pay that one off first. Once you finish with that, you move down the list in order of the highest debt rate. As Investopedia notes, the Debt Avalanche Method is useful but takes a lot more discipline than the Snowball because you see significant impacts on your debt state far less often.

Which Method is Better?

When I started, my methodology was the Snowball Method. The reason I chose that one was because I didn’t think I’d have the willpower to keep up with the Avalanche if I wasn’t seeing constant progress every now and again. In hindsight (because they say hindsight is 20/20 after all), the Avalanche method would have cleared me of debt a LOT sooner than the Snowball. They both work, but one needs a significant amount more willpower than the other. If you think you can handle it, then the Avalanche is the far better option. The Snowball, however, works. You’ll just be in debt for a little longer and pay a bit more in interest. Have you heard of any other debt management tactics? I’d be glad to listen to what you have to say about them. Next article, I’m going to cover a change in how you think about money, so you’ll continue having good financial habits going forward. Until next time, remember to fill out your expense tracker, please.


Jason K. Dookeran




Self-employed writer. Amateur Game Dev. Personal finance enthusiast. Techie. Traveler. Made a side-hustle into a full time gig. https://ko-fi.com/thechain

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Jason Dookeran

Jason Dookeran

Self-employed writer. Amateur Game Dev. Personal finance enthusiast. Techie. Traveler. Made a side-hustle into a full time gig. https://ko-fi.com/thechain

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