Pankaj's strategy and the dawn of debt freedom
dawn of debt freedom,
Motivational story,
English story,
Best story, short story',
The power of money,
Here is a motivational story based on getting out of debt, which emphasizes the need for systematic planning, sacrifice, and finding new paths.
Pankaj's strategy and the dawn of debt freedom
Pankaj was a middle-class young man who bought a big house to fulfill his dream. But over time,
home loans, car loans and credit card debts ruined his monthly budget. More than half of his salary was going towards paying loan installments (
EMIs), and he was constantly under mental stress.
One day, when one of his friends asked him, "Why are you always sad?", Pankaj realized that he was not just paying off his debts, but was living his life under the burden of debt. He decided that now he would take concrete steps to get out of this situation.
step 1 (Acceptance & Planning)
Pankaj first took a notebook and made a list of all his debts:
* Credit card (small debt, high interest): ₹1,00,000 (Interest rate: 25%)
* Car loan (medium debt, medium interest): ₹5,00,000 (Interest rate: 10%)
* Home loan (large debt, low interest): ₹30,00,000 (Interest rate: 8%)
He decided to adopt the 'Debt Snowball' strategy:
Pay off the smallest debt first, whether it has a low or high interest rate. This will give him the motivation to pay off a debt quickly.
Step 2: Sacrifice & Extra Income
Pankaj made some sacrifices to pay off his debt quickly
Cut costs: He stopped going to expensive restaurants, stopped buying non-essential items, and started using public transportation instead of expensive cabs.
Extra effort: He started giving online coaching related to his subject after office hours, which started earning him an additional income of ₹10,000 to ₹15,000 per month.
He started using this extra money directly on his credit card debt.
Step 3: The Snowball Effect
In just 6 months, pankaj had paid off his credit card debt. This first big success gave him immense joy and encouragement.
Now he diverted both the EMI that was going on his credit card, and his extra earnings, towards the EMI of his car loan.
Where earlier he was paying only ₹12,000 EMI on his car loan, now he started paying around ₹25,000. In just one and a half years, he also paid off the car loan. This second success gave him more strength.
Sunrise of Liberation
After getting rid of credit card and car loans, pankaj's monthly cash flow increased significantly. Now he started paying all this amount as additional amount in the installments of his home loan. Due to which, the home loan which was supposed to last for 20 years was paid off in just 10 years.
Pankaj breathed a sigh of relief after being free from the burden of debt. Now a large part of his salary was saved for his savings and investments.
Pankaj's story shows that getting out of debt is not magic, but requires a clear plan, control over spending, and the patience to achieve a bigger goal by completing smaller goals. The 'snowball' strategy (starting with smaller debts) to reduce debt can be very motivating.
🦁Kathi kuwar🐾
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