goals


Commitment made to be Debt Free – CHECK

Debt Freedom Plan – CHECK

Family on Board with Plan – CHECK

Workable Budget – CHECK

Bad Habits with Money Changed – CHECK

Preparation for Unexpected Expenses – CHECK

Patience for the time it takes to Pay off the Debt – FAIL

I see the light!  And I want to run towards it, out of this debt tunnel.  But for now, it’s just a waiting game.

The debt that seemed overwhelming in the beginning, has now progressed to an annoyance .  It’s the stain of our past poor financial choices.  The scarlet-letter “D” that sits there as we wait for the paycheck to put another chunk towards paying it down.  We get the paycheck, we pay the bills and then we wait, and wait, for the next paycheck to roll around.  And the cycle continues…

In the meantime we continue to do the right things, we stick to the budget and we forgo impulse buys.   What else is there to do when you’re saddled with debt?

Perhaps I’m being a tad overconfident but we just had a month where: one of our animals required a vet visit, there were three family birthdays (gifts), one christening (gift) and the TV Broke.   We made it through without resorting to credit card use, because we were prepared.

I feel invincible and impatient.  That scarlet “D” is still hanging around as a reminder of the past, but it is no longer representative of how we handle our money.

Our “reasons” for being in debt seem so pitiful now that I hesitate to even write them.  I can see, only in retrospect, they were the root of all our debt:

1)  We really didn’t care.

2)  We took the easy (irresponsible) way out of everything.

It was that simple. All of the excuses that go along with those “reasons” are just that, excuses.  So the “D“,  while annoying is rightfully deserved.

I take being debt free very seriously, but it is hard to keep solemnly caring about it.  We made financial mistakes, we rectified them, we are making slow and steady progress.  Wake me up when we get there.

Our dreams, like travel (paid for with cash), seem attainable.  I look forward to that time, while I begrudgingly wait patiently for that day to arrive.

To those just starting to get out of your money mess, it does get easier, in fact in gets downright BORING.  (But in a totally good way.)

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IRS – I take back all the nice things I recently said about you…YOU STINK!

Or it’s probably congress who stinks, I’m not sure who, but basically whoever is responsible for IRS Publication 15 (Circular E – Supplemental Wages) THEY stink.  This rule is going to cost us over $300 of our own hard-earned money.

The rule is regarding the tax treatment of bonus checks.  My husband receives a once a year bonus check in March.  According to the above rule,  this check is taxed at a mandatory 25%.

As I’ve stated before our effective tax rate is a ridiculous 1.26%.  I know, I don’t have a lot of room to complain with a tax rate like that, but we have deductible mortgage interest and property taxes, deductible student loan interest, crazy “city wage tax” and state taxes, three kids and are squarely middle class so it’s not like we are doing any creative accounting. ( I don’t even bother with our meager charity deductions because I feel I little guilty about this.)

I changed the w4 withholdings to 15 exemptions this year to no avail!  The paychecks don’t have a penny of Federal Taxes withheld and we will still get close to $3000 refunded.  The IRS will hold 23.74% of that bonus check in their coffers from March 2010 until we get it back in the form of a tax refund in MARCH of 2011.

In the meantime we will pay interest on credit cards with rates as high as 24.5%.  In the past I didn’t care, I loved that BIG REFUND.  But now that we are serious about no debt, and have a plan in place to get rid of it all, I’m a little miffed.  Each time I make a “Debt snowball” payment (or “debt avalanche” payment to be more precise)  I choke a little when I see how much of it goes to the interest and not the principal.   That chuck of our money we have to wait a year for would really speed up the process and save us money in interest or go to beefing up the emergency fund which would earn interest for us.

Do you think I can invoice the government for all the accumulated interest we will pay over this year?  I mean I don’t expect them to pay interest on tax refunds when most people who CHOOSE to CAN avoid them –  but what if  the IRS won’t ALLOW you avoid a refund?

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