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Plan #6: Tax Debt

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We survived No Spend October, extended it into November and have just returned from a fun holiday week with my family, it’s time to get serious about driving down my debt balances again. As I mentioned in a previous post, I was able to save enough to pay a good chunk towards my tax debt the week before Thanksgiving.

I did really well in the last year with my targeted plans:

Pay Off Tax Debt

I had decided before the overwhelming success of No Spend Month, that the next debt I would zero in is the outstanding tax debt left over from my marriage. While the interest rate is not as high as my credit card, the mental burden is HUGE! And I want it gone.

I have decided to take a page from the Dave Ramsey playbook and focus on it with a debt snowball. (Not sure if I’m saying that right.)

I’m going to continue to pay the minimums on all other debt (except my car payment which I will continue at $400 per month instead of $308.) And then at the end of every month, make an extra payment to the tax debt based on my income that month.

Anticipating that work will continue to be steady and continue to grow, my goal is to have this debt completely eliminated no later than January, 2019. But I hope to pay it off in December by sticking to a more frugal monthly budget as we did in October. As of now, the balance is right around $1,001.

Full debt update coming next week…

 

 

 


Hope’s Debt Update – June, 2018

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I didn’t realize it had been so long since I published a debt update. You can see my last one published in February here.

June, 2018 Debt Update

Here are my debt numbers as of yesterday. Despite limited income over the last few months, and primarily living off savings, I have stayed on track with paying off debt.

Creditor
Balance

(as of 10/14/17)
Interest
Min. Payment
Student Loans$34,3752.88%$0 (income based deferment)
Car$6,8647.00%$308
Credit Card$4,98217.00%$36
Collections 3 (Ex-husband)$4,9536.25%$246
Collections 2 (Apartment)$499$0
Self Lender$29110.57%$97
Summer Camp (2018)$00.00%$0
Taxes (State)$00.00%settled with refund for 2017
Total$52,150$687

I removed the debts that were previously settled. Since the February update, the kids’ summer camp was paid off and my VA state tax debt was settled with my 2017 refund.(Received word of this, this week – yeah!)

State and Federal Taxes

I had both VA and GA earnings so had to file in both states. I am still waiting on the GA results, but I anticipate a refund. Because I am a first time filer in GA, I had to file via paper and their website says it can take up to 9 weeks to hear anything.

I am also anticipating a federal tax refund. More on that once I hear from the IRS. (Because of the final year of the adoption tax credit, W2 job where I had more than required withheld and my estimated tax payments from my consulting business, I was well covered.)

Looking toward the Future

As I put in the comments yesterday, I have now contracted out full time hours with my consulting business. While some hours I only earn $17 per hour, the bulk of the hours are contracted at $40 per hour.

After I get a month under my belt, I will publish an anticipated budget. For now, as many BAD readers advised when I wrote about the unemployment benefits I was to receive, I am only spending the minimum on the monthly bills and saving the rest.

Once I get back on stable ground with all the new clients, I will begin with a new debt pay off plan. My first goal…pay off my single credit card!

Your advice has been invaluable these last four years, but most importantly the last few months. Doing at this debt update gave me a lot of hope that being debt free is not too far off.

 


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