My Debt Reduction Plan for 2011

In my previous article about Paying off Debt Created by My Brother, I explained how I have to give a helping hand to him and my parents in paying their debt of more than 100,000 US dollars or precisely 117,647 (if the current Rupiah to US dollar exchange rate is 1 USD = Rp. 8,500) to BRI (Bank Rakyat Indonesia or Bank of the People of Indonesia) - this is a state owned financial institution which my brother borrowed the money from. He used the money to run his construction business but due to poor management and lack of experience his company collapsed only after one year of its operation. 

After these Christmas and New Year holidays, I plan to ask my brother

• to call his creditor. I need to know the actual amount of debt that he cannot pay. Then I will ask him
• to negotiate a new debt repayment plan that will not bring all the businesses of our families into bankruptcy.
• We need positive cash flow from our profit margin to run our businesses so that we will be able to continuously pay off the debt in the long run.

I know that most banks are reluctant to reduce the interest. But at least they need to know our financial condition and our commitment to pay off the debt.

For 2011, I have made a debt reduction plan which consists of two actions, i.e.: Cut Back and Earn More. I am not an overspender when talking about how I use my money every day. I am always frugal in my lifestyle. But the recent financial crisis that my brother and parents face force me to be more careful in spending each rupiah (the Indonesian currency) that I have in my wallet so that I can help them in paying off their debt. Why should I work hard for paying off debt that I didn't create? Well, that's the question that I asked to myself. It's not my debt but I must not turn down my mother's request for help.

As of today I begin recording all the spendings that I make every day. This is important to control how efficient I am in using my money and whether the spendings are really needed. Most of us do not record our daily spendings when everything is fine. I personally have to create my own budget plan in order to find out how much my monthly expenditure is and how much I can save. I use Microsoft Excel 2007 to record my spending and earning items. This is a very good software both for personal finance as well as for more complicated accounting calculations.

I spend my money on several categories:

• Traveling around Manokwari regency to gather photos and information for my writing business
• Donating money for several projects such as educational and ecotourism schemes aimed at empowering the indigenous Papuan people
• Buying ecotourism devices for serving tourists such as snorkeling masks, compasses, travel bags, lamps (for night tour in the jungle or for caving), mountain bikes
• Food
• Buying art materials for my hobby in drawing and painting in watercolor

I could spend my money up to several hundred US dollars for traveling around Manokwari regency of West Papua province. In one month I usually do 3 to 4 trips to the mountains, the islands and around the Manokwari city. Sometimes I visit new sites as a way to survey new places which I think are potential for the development of ecotourism and income generation for the local Papuan people. I earn money from Google Adsense through most of the articles that I publish on the internet.
By tightening my monthly spending budget, I will be able to save significant amount of money which I will give to my parents to pay their debt. I decide to reduce the number of my monthly trips to two. Also I will be more careful in donating money to the indigenous Papuan for ecotourism schemes that actually is the responsibility of the government.

More money from Saving - By cutting back a number of unecessary spendings, I will be able to save more money. I also plan to earn more.

Make more money from Google Adsense - In recent months, I see significant increase in my income coming from Google Adsense through my englishland.or.id website, and charlesroring.blogspot.com as well as manokwaripapua.blogspot.com blogs.
I plan to give more attention to my writing business by implementing SEO in my articles and at the same time improve the content quality of my articles.
Selling more drawing and watercolour paintings - I mentioned above that one of my hobbies is drawing and painting in watercolor. I sold three watercolor paintings this month. I will try to sell more paintings by making more paintings on certain categories that I think art lovers are looking for. Perhaps, I can sell some paintings to the bank where my brother got the loan.
Making money from ecotourism - As a travel writer, I always spend more money when traveling. Now I have to reverse it by making money from this lucrative industry. Usually, I donate the money that I earn from guiding tourists back to the local people living in the mountainous region such as Arfak mountains through the purchase of equipments such as water hose, toilet bowls, plates, cooking and eating utensils that will improve their service to tourists. Now, they have to buy the equipment by themselves from the money that they earn from providing basic accommodation and guiding services to ecotourists.

So, these are my debt reduction plan for 2011. I will constantly evaluate my cut back and earn more plans every day. If these schemes still do not give me a significant improvements in increasing my monthly earnings to several thousand US dollars and my efforts on helping my parents and brother in paying off their debt, then I will try to find a job abroad perhaps as a naval architect working on resistance and propulsion of ships or in other industry that is related to my talents and expertise.

Also read:

• Debt Consolidation Efforts and My Plan B
• Getting Out of Credit Card Debt