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April ’15- Month in Review

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I hope everyone is having a fantastic week thus far!

I want to start doing a “month in review” here on BAD to clue everyone in on what’s occurred during the previous month. I think this will help summarize what’s going on in my life as we move forward on my debt reduction journey and allow people to quickly get up to speed that didn’t catch my weekly updates.

To summarize, A LOT occurred in April:

  • I began the month (technically it was March 31st, but let’s call it April) by telling you what’s been bothering me even since I started my hardcore paydown (read it here). This was the hardest to write but most heart felt post to date. Update: I’m starting to realize time is more important than money and or gifts, and spending time with people and giving them a minute or two every couple of days is priceless.
  • I vowed to help my sister by contributing to a 529 in my nephew’s name (read it here). Update: I officially opened up an ESA (not 529) account in my nephew’s name over the weekend. The first contribution will be this Wednesday.
  • In the same post, I decided to re-contribute into my company’s 401K plan (read it here). Update: All the paperwork has been filed and I’m set to start contributing 4% (giving me the max. 2% company match, as well) of my paycheck this Wednesday.
  • I also decided to start budgeting for $50 of “fun” money per month to use to go out with friends (read it here). Update: I’m going to set the $50 aside on the 2nd Wednesday of every month for the following 4 weeks. I don’t have any other bills, except my electric due at this time.
  • I came across a roof leak in our house and freaked out! (read it here) Update: I haven’t opened any ceilings yet (mostly out of fear) but it’s been dry now since the day I ventured upon it. We’ve had some pretty good rainstorms already this year, so if it was from rainwater, I feel it would still be wet. My hunch is still ice dams.
  • I got a work bonus and a raise! (read it here) Update: The bonus was quickly put into my savings account. The raise has amounted to $17 a paycheck, but every additional penny helps.
  • We (GF and I) finally got around to celebrating Valentine’s Day, while also doing a fun little getaway up in Buffalo, NY (read it here).
  • Lastly, I got around to putting  our summer plans down on paper (read it here). It may not seem like much but I have a feeling it’s going to be a busy one this year!

For those interested in where my budget shook out:

April '15

I had some major expenses this month: 1) a tax bill close to $200. Since my I didn’t pay enough taxes last year to match my income (which was greatly increased due to pulling out my retirement fund), I owe the state of PA estimated quarterly taxes this year. 2) Our get-away cost nearly $400 in total 3) I spent more for groceries and dinner than I normally do. After my post to kick-off the month, I’m not too upset about this.

In debt reduction notes:

I reduced it by OVER $2,500!!

Pretty exciting stuff.

However, all good news aside, I had thoughts last week of stopping my debt reduction pay down altogether (obviously I’d still pay the minimums), which would have also meant writing for BAD, too. As I was sitting my car thinking about everything, I couldn’t help but wonder if instead of throwing every extra cent at debt, if I threw every extra cent into my savings. It would build quickly, giving me a large enough windfall to get through any obstacle, and when the balance was big enough, I could use it to pay off all the debt at once, alleviating my stress while giving me comfort that I won’t be in debt forever. After talking it over with GF, the feeling came to pass. With savings interest rates so low, it wouldn’t make a ton of sense mathematically, but, as I’ve always said, being in debt is a psychological, as well as, financial burden.

But what do you think? Do you ever get feelings like this? If so, did you suddenly change course, or did you let it pass? Let me know in the comments!

Have a fantastic week!


Tax Setback

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Husband and I are both self-employed and, therefore, pay our own taxes (as opposed to having taxes withheld from our paycheck). We file “married filing jointly” and I knew that for 2014 we’d be teetering between two tax brackets: between paying 15% and 25%. (Side note: Doesn’t that seem like a huge jump? I don’t want to get political or anything, but the next bracket goes from 25% to 28%, which seems more reasonable. But the 15% to 25% jump hurts! Ouch!). As a result, the amount we paid for estimated quarterly taxes varied (I typically paid about 20ish percent of our income). Well, go figure, that wasn’t enough. And now we’re left with a pretty hefty sized tax bill.

So that’s fun. And something we’ll be dealing with in the coming months. I’ve never had taxes be part of the blog before (I’ve always reported our income “after taxes” – said in quotations, since clearly we weren’t withholding enough for taxes). So, although our tax bill is obviously a new debt, I’m going to keep going how I have been and simply pay that bill off the top of our income rather than putting a new line item (titled taxes) in our monthly debt list.

The big bummer, of course, is that I’ve been crossing my fingers for a pretty profitable next couple of months as income increases a bit. It’s not a guarantee, but last year hubs’ business was booming over the summer. And although I continue to get paid the same as always (same amount per class), the classes I teach over summer are condensed so instead of having my pay spread across four different months I get two lump sums, making two summer months (June and July) look really good for income. (Again – same actual pay per class, but it’s double the sized paycheck as during the Fall or Spring semesters). I still hope to make some big progress with other debts, but this is certainly a bit of a setback as we pay back Uncle Sam to the tune of $3500. Yes. *Groan!!!!* We’ve owed before (we owed a little bit last year), but never to the extent of owing multiple thousands of dollars.

I do have a plan though. I’ve already set aside some money from this month’s income that I’m going to put toward taxes. If I spread this out over three months, the hit won’t be as hard. We have about that amount of time to pay (longer if we pay additional penalties, but I’d like to avoid that and just pay this off ASAP), so about a thousand a month is going to be coming off the top of our income for the next few months. Disperse the pain a bit instead of being hit all at once.

I guess it’s a good thing. New tax bracket means we’ve had a higher income. That’s an awesome thing for us small-business owners! I only hope to continue seeing our income rise across time, so I better get used to seeing a growing level of taxation. ; )

Did you owe the government any money this tax season? If so, how did/do you plan to pay for it?

Did you get a refund? If so, what’d you do with it?


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