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The www.FedPrimeRate.com Personal Finance Blog and Magazine

Friday, April 18, 2008

Have I Got A Debt Reduction Plan For You!

This is the view that I enjoy during dinner today. (photo credit, David Secor) Click it if you'd like to see the full-sized version.

It's a big change from just a few months ago, where the dinner hour conversation was interrupted by deep bass thumping out of the speakers of passing cars and by the loud hip hop and reggae music streaming from the cars waiting outside of the local drug selling spots.

I no longer step out my door onto a sidewalk littered with wrappers and trash left by careless people passing by when leaving local businesses, legitimate and illegitimate. Instead, I am greeted by wide-open sky and an almost mystical natural beauty.

The children have more freedom than they've ever experienced. When they lived in the city, they weren't allowed to play out front without adult supervision. It was not safe. After a couple of exchanges of gunfire between neighborhood drug dealers, it was no longer safe to allow them to play in the backyard without supervision. Today, they run, they play, they explore. They see the night sky and countless stars, they see wildlife. They are learning so much and are having a wonderful time.

And, best of all, I've significantly reduced my debt burden and, as time goes on, will continue to lessen the amount of cash I need to spend on daily living -- certainly a good thing with all the turbulence and trouble in the realm of economics. Not only is the United States struggling, but the world as well. Major exporting nations banning the export of rice and of wheat, oil prices skyrocketing, food costs rising, the dollar dropping in value... the list goes on and on. Clearly, it is a good time to consider debt reduction, with a goal of debt elimination, and the building of a more sustainable lifestyle.

Oddly enough, reducing my debt burden began with taking on more debt -- $20,000, to be exact. However, this debt is productive debt, very productive indeed. The concept of productive debt versus consumptive debt is a bit of an old-school notion. Though, I suspect that, as these easy credit, no money down, buy now pay later, no doc loans days come to an end, that old-fashioned, old-school notion will soon be back in style, at least among the smart set.

So, what did I get for my $20,000 no credit check, easy terms debt? The one that I pay back at a rate of $360 per month? The one that, if I pay the principal all off within the year, becomes significantly less, as the interest charges that bring it up to $20,000 will be waived? (And, I will!) I got 46 acres of land, in a warm and sunny climate perfect for relying on solar power, in a region with winds that make wind power an attractive alternative to more traditional energy sources. I got space for food growing and home building. I got a lifestyle that -- immediately upon my arrival, before anything was set up at all -- dramatically reduced my living expenses.

In NY, the last heating bill I paid for my apartment in the two-family house I shared with my sister was just over $600 and that was for the month of December. I have no heating bill here, but I do have a lovely tan. The monthly land payment is less than the amount I gave my sister monthly for my half of the mortgage on the house. (We got rid of that when we came here.) Those are just a couple of the quick and easy ways that I've experienced a reduction in my living expenses.

In the weeks to come, you can expect to read more about my adventures in working towards a debt-free and richly economical lifestyle. I look forward to sharing the details of my personal debt reduction plan and my progress in making it happen. I hope that some of my experiences are useful to you, helpful in your efforts to achieve your own debt and lifestyle goals.

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