Here’s Your Next Superhero!
September 25, 2015I was talking with a young man today who was facing a rather large debt load and was looking for a way to effectively manage that debt so that it doesn’t ruin his life or at least make it difficult to feel anything other than trapped by his debt. He bought a relatively inexpensive ($20,000) car, has around $8,000 in credit card debt and about $80,000 of undergraduate and graduate school loans. His salary today basically allows him to pay rent, his debts and a little bit of discretionary money for entertainment. He said that his life was not very much fun right now and he feels like he is suffocating. He sounded very frustrated and he joked that at this stage, he’d be willing to sell an organ to raise cash to pay off some of the debt.
So…I decided to change the topic. In order to figure out what mattered to him, what motivated him, and what could help him find a ray of sunshine in his situation, I wanted to know what made him happy. We talked about his hobbies and he joked he really didn’t have the money to have hobbies.
That’s when I noticed two superhero stickers on his laptop. Having overheard an argument between my son and a few of his friends about whether Marvel or DC Comics had the better superheroes, I wanted to get another opinion on the matter. When we talked about comics, I saw an energy in him that wasn’t present in the first part of our conversation. Finally, I had some ammunition. He had given me something to work with.
The Goal
One of his lifelong goals is to go to Comic-Con in San Diego and do every behind-the-scenes kind of event associated with it. I told him that could happen, and it could happen without requiring the sale of any of his vital organs. The catch? It was going to be his reward for becoming debt free. He was now officially bought into the plan.
The Plan
Like a superhero has an archenemy, his debt is his enemy. If you’ve watched superhero movies or read comics, you’ll often see the main character fight a group of attackers. But, if you look closely, you’ll see that he is merely holding most of the group at bay while focusing the fight on one main attacker. That’s what we are going to do with his debt.
To hold everyone at bay, he is going to pay the minimum payments on every debt he has with the exception of one. That one is the one with the highest level of interest. That enemy MUST be vanquished by putting every ounce of energy into defeating it. Every dollar that can be mustered is thrown at that debt until the balance is zero.
When that debt is gone, pick your next enemy by ranking interest rates. Like it says on the shampoo bottle: “lather, rinse, repeat.” Keep doing that until the debt level is zero. Now he has a plan of attack for his debts.
The Strategies
The next step was to find ways to accelerate the paydown of debt. He enjoys his apartment because it is close to work, the commute is easy and it’s big and semi-luxurious. The downside is that it’s a bit expensive.
His lease is up in four months and he has a decision to make. Is he renewing the lease and staying solo, adding a roommate (the place has enough room and he uses the extra bedroom as a spare office/workout room) or staying with his parents in the area, who have offered to let him live there rent free for a year to get his financial life back in order? He is unsure about that because his parents and his girlfriend don’t always see eye to eye.
I’m not sure which way he will go, but I suspect that he will add a roommate to cover half the rent at his apartment. He likes his independence, and he has a friend who is looking for a place to live so that option just seems like his preferred path. With that half of the rent, he will use every dollar to pay down his credit cards, then his graduate loans, then his undergrad loans and finally his car since it was a 0% interest loan.
He may also, for a few hours on the weekends, drive for Uber or Lyft in order to make a few extra dollars, which will also be used to pay down debt. He is absolutely determined, now that he has a clear vision of a debt-free life that allows him to not just go to Comic-Con one time, but on an annual basis. He and his girlfriend have even already picked out the costumes they plan to wear at the convention.
Like a superhero (you can choose either DC or Marvel, I have no strongly held opinion on the matter), you can vanquish all of your debt archenemies if you have focus and a plan. It may not be easy. You may have to do some hard things. But no superhero ever became a superhero without facing some obstacles.
You too can be a debt destroying hero! Who knows? Maybe your story could be the subject of a movie. If so, give some thought to who you’d like to play “you” in the movie. I’m going to call my kids and ask who would play me… (although, I’m not sure I want to hear “that really old guy from the local news channel”).