Thursday, February 19, 2015

Gung Hay Fat Chow

That's happy new year, if you're Chinese. I'm not, but a whole lot of very many people are, and to them, I wish a joyous and prosperous year. But what I really want to think about today is money. Being a first-time home buyer, this was the first year that I did my taxes with the assorted credits one benefits from when you sign your name on that deed. I had anticipated having a lot of money to pay in taxes because I had taken an early withdrawal from my retirement account in order to purchase my home. (I think this was a smart thing to do and I think more people should do that if they have the opportunity to buy a house, even if you have to pay taxes on it. Your tax credits will cover what you owe many times over, believe me.) So anyway, fearing a horrible tax bill, I had an additional amount held back from my checks and that, combined with the lovely tax credits, resulted in about a $5,000 refund. So yay! What I want to do with that refund is buy the best used car I can afford for said $5,000 and drive it till the wheels fall off, avoiding a car payment altogether. I am leaning toward a 2005 Honda Civic. I also like Toyota Corolla. I think I should test drive a few cars. Anyway, that's an option. The other option is to use the $5000 to pay off all my bills, or to do some combination and buy a cheaper car (yes, there are cheaper cars) and use part of the money to pay off some of my bills. I really, really strongly desire to get out of debt this year. Romans 13:8: "Owe no man anything but to love one another." I have a free to me car to drive (my parents' handicapped van) until the end of June. I've already paid off one account, so I'm doing that snowball thing where you pay off one account with the highest interest and then use the payment you used to make for the account that is now paid off to make double payments on the next highest interest rate until that is paid off, and so on. The only problem with that is that it is slow. I want this debt off my books now. (I don't regret incurring the debt, by the way. I used it to take myself and my 22 year old daughter around Europe and it was a fabulous trip that I am so happy we did.) Still I hate paying interest and I hate knowing that I am in the hole. So I'd like to get those accounts paid off, and then I could take the roughly $500/month I'm paying out in payments and use it to make an emergency fund. I could get $10,000 in 20 months with discipline. And after that? I could start saving for vacations again. I could pay someone to clean the house and mow the lawn. I can get new furniture once the pets are all gone. One thing I know? I will never go back to wasting it all on clothes I don't need, restaurants where the food is consumed and forgotten, assorted crap for the home that ends up getting donated to charity...

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