I'm a nerd. I admit it. I have always looked forward to doing my taxes. I love plugging in the numbers and seeing what the outcome will be and how much I'll be getting back. But this year... This year I didn't want to dive in. I was afraid.
I've tried to say little on the politics on my blog. I know I have friends who disagree with me and I am not always as educated as I'd like to be before getting into such a discussion. So without getting too political, I would be happy if I got even $100 back, or (worse yet) if I didn't owe money on my taxes this year! With five children it would have taken some serious conjuring to make that happen, but it is our first year as landlords, and I wasn't sure how that would affect things. It was impossible to say how things would come out.
|The Tax Preparer - AKA: Mom|
But I do like to avoid the rush and do them early. I had my papers in order and all in one file folder. I got together with my tax preparer and we made good use of our time this week. In the end, she chided me for not keeping better records of expenses on the house in Baltimore (I'll do better this next year - we left much of those deductions off; I don't want to risk an audit for such a small extra amount), she reminded me of other expenses I did have records for and in the end there is great news and not-so-great-make-me-angry-with-the-government-anew news.
I always take the bad news first - it's my way of facing it, owning it, and setting it aside so I can truly enjoy the good news. So here is the bad news:
because Jeffery took a full-time load of college classes this year to finish his degree, we got a 1099-T form to file. The government is paying anyone with educational deductions sometime after March instead of right away. So if you have a 1099-T, know that you'll be on a "delayed" schedule.
As "bad" news goes, it is minor. Minor in the First-World-Problems kind of way, but irritating nonetheless. In the words of Veruca Salt: "I WANT IT NOW!!" (Okay, my tantrum is finished.)
Here is the good news and The Plan:
We'll get back enough of a return to pay off BOTH of our remaining credit cards - and cancel them - and then we'll only have our two house loans and my student loan left to pay before we're debt free!!
So here are the numbers: We'll pay off $7500 in credit card debt, which will leave us with $13000 for the student loan, $43,000 for our HELOC, and $190,000 for our mortgage.
And The Plan:
First - we're bringing in more money in several ways:
- Jeff was promoted last week, raising our income slightly, and on an earlier schedule than we thought it would be. So that money will go straight into savings until we have our $1,500 baby emergency fund in place (If we're very tight, we can do that in about two or three paychecks. I know - why don't we do that with the tax return and put the two paychecks on the cards. I can't stand knowing I'm paying the interest and can get rid of them in one huge swoop. It's naughty of me, from a Financial Peace University perspective, but I really, really want that win!)
- In short: we'll continue to live on the lower amount we were making before his promotion.
- On top of that, since we do get such a big return back each year, and I'm NOT happy with the way the government is handling MY money, I'm going to increase the number of dependents we claim. In the past I've always been very afraid to claim our whole family because I didn't want to owe money. I've always claimed one fewer than we have. So now our family is seven strong, and I have been claiming six. No more. I'm going to claim 8, or 9 this year and put that extra money into the student loan as well.
- I have started selling Young Living Essential Oils and doing parties as a consultant with The Traveling Vineyard in addition to what I'm selling in the Cocoa Nutty Goodies store (more on that later this month) and that extra money will go to the loan.
- The money that was going into the two credit cards (about $150 a month), will go to the student loan.
|The Traveling Vineyard Wines|
It will keep our budget very tight for a while longer, but if we follow it, we can be nearly debt free (except the house) by November. My ideal-vision goal is to be done by my birthday in September. I follow another blog where he creates a pie chart each month on how much they still owe on their mortgage (his only debt). I don't have a spreadsheet set up for that yet, but I like the idea so plan to put one on here in time.
To keep me on the Path to Freedom: I have arranged to start leading a Financial Peace University class in our church. That starts in March. I won't earn money from it, but I will earn a core community of people to help challenge me and stare me in the eye and ask me how I'm doing in these goals.
So here is my challenge and question for you:
Have you done your taxes yet this year? What changes will you make in your financial goals? Do you like what you see? Where will you go from here?
Please share and help us form a community as we work on better health and well-being in every aspect. Things are rough right now for many people, but they don't have to be if we share the burden.