How to Survive a Depression

The recent two day up swing in the stock market has not come as a surprise to me. I switched around all of my investments at the start of November in anticipation of this. I just hope the trend continues till the year's end.

Recently the US dollar has lost ground to foreign economies. Five years ago when I was in Canada, one US dollar was the equivalent of 1. 27 Canadian dollars. Today they are close to even, with the win going to Canada, our little sister in the north (1 US dollar is .99 Canadian dollar). I don't even want to get into the US dollar vs. the Euro or Pound Sterling, it makes me ill.

Credit card debt and mortgage payments are strangling American families at incredible rates. My wife and I have been in our home for 4 years now, and we have only paid 3,000 dollars off on our original loan. We have completed 13 percent of our note in time, but have only paid off 3.6 percent of the money. I am familiar about how amortization works, but this does not jive. We have started looking at ways to maximize our money. These are the payments that are draining us unnecessarily:
1) Member ship the YMCA. We currently payout 59 dollars a month for a total of 708 dollars. I figure that combined we have been to the Y a whopping 10 times this year. This equates to 70.80 per visit. Needless to say, I am canceling the YMCA membership after I finish writing this. Does they Y offer us something we cannot accomplish on our own? Or cheaper? My wife and I prefer going to the park with our son for walks as exercise. Why are we wasting this money?

2) Our cable bill. We currently have HD, Family Pack, Sports Pack, Broadband Internet Service and HBO. I won't live without HD and HBO, but all the others are on the chopping block. Our current cable services bill is 144 dollars a month. By switching to a slower DSL line and removing the family and sports packs we can trim another 22 dollars a month.

3) Primary mortgage insurance. We currently are paying this 46 dollar amount fee. We bought our home from a HUD foreclosure. If we would get our house appraised today, we would realize well over 20 percent equity in our home. I need to see about getting the wheels of progress moving on this and figure in the costs. If it would cost us 1200 dollars to refinance, we will save this amount in 3 years by eliminating the PMI.

I thought our list would have been longer, but necessary items such as health and life insurance, child care and saving for retirement can not be overlooked. But just these items alone could provide us with enough money to put an addition 127 dollars on our house payment each month. By paying the minimum payment, we will close on our mortgage note on December 2033. If we add in this 127 dollars as prepayment on the principal, we would have our home paid off in 2028. But if we could increase our monthly prepayment to 450 dollars, we should have the home paid off in mid-2013. Now this jives.

So by eliminating these extra costs and adding another 323 dollars per month we can be free and clear of any house payments. This my loyal readers is how to survive a depression. No house payment eliminates a large money loss every month, provides indescribable security for a family, and if the US economy does manage to get back on track will allow this family to invest in the it's future intensely.

Just the difference in the interest paid on the home over the course of 30 years vs. 10 years is convincing. 86000 vs. 38000. This is the equivalent of 2400 dollars a year in free money to do what ever you wish.

Our home isn't fabulous. Our home isn't big. Our home will need repairs in the upcoming years because of it's age. But it is our home and I will do everything possible to keep it. I plan on being proactive for the next 6 years to do this. A huge undertaking and far from the norm. But as Dave Ramsey say, "It's good to be wierd"