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Note: This is a post from Joan Concilio, Man Vs. Debt community manager. Read more about Joan.
Back in February, I shared that we needed to pay the IRS $7,104 by April 15. Last month, I said that it looked like we were well on track. Well, break out the party hats…
We wrote the check April 2, stuck it in the mail together, and have since seen it clear our bank account.
This officially means the taxes are paid by the deadline. (Meaning, no payment plan – and ongoing debt – needed!)
We feel pretty accomplished – but we also feel like there are some pretty big steps we need to take to move forward.
Our debt level
So here’s the most awesome news. Our total debt dropped $800.65 in the past month! In comparison with some previous months, which were at times over $2,000, it’s not a gigantic number.
But it reminds us just how fortunate we are – even when we can’t pay “much extra” by the standards we’re used to, we’re still making progress. And that tells me that whether it’s in 2 years or 5 years, this debt WILL disappear.
As of today, our total debt number stands at $57,752.09, down $39,135.94 from our starting point in January 2011 and making us 35.61% debt-free.
Updating our Very Next Steps
In our February post, I mentioned that we’d set goals that didn’t focus as much on our debt repayment for the short term. They were:
- Adjust tax withholding to prevent issues next year. Subsequently, adjust budget to match new (lower) amounts take-home paychecks!
- Rebuild savings account back to $1,700+ (more than one month’s mortgage payment) over 3-4 months.
- Restart payments above the minimum to credit-card companies, first in slightly lower amounts as we rebuild the emergency savings, and then at as high of a rate as our budget can take.
- Rebuild checking-account cushion back to $1,000 over 6-8 months.
We’re still aiming at all of these in order. However, we’ve made another change as well. As many of you know, we’re a homeschooling family, and as much as side hustling and debt payoff are super-important to us, our daughter comes first. And she needs a bit more attention than she’s been getting in the past year.
As such, I’ve decided to cut back on some of the freelance work I’ve done to generate a large part of my income. That’s not an easy decision to make, or one we took lightly.
But we feel strongly it was the RIGHT decision.
That said, we’re looking at a fairly major income hit starting almost immediately. That wouldn’t be so bad if the taxes hadn’t eaten up our savings and checking account cushions, but it’s going to be tight for a while.
Our goal is simply to stay in the black, to cut what we need to cut, and to do the right things with any money we have. That means building up an emergency fund, then tackling payments above the minimums, then getting a cushion in checking.
The debts will still go down. It’s a marathon, not a sprint. I’ll still be sharing updates each month, as well as tracking all our debts in summary (complete with V.N.S. for each) on my “Joan’s Finances” page – so you can see how we’re doing at a glance.
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One thing I know for sure: We WILL make it. I’m not willing to come this far only to slide backward now.
As we gear up for the start of our next You Vs. Debt class, it’s become more important than ever that I participate – not just as a leader, but as a student ready to take the challenges (again) and take action (again!)
By the time I update next month, I’ll have a good budget in place for our new income. We’ll be able to set our sights a little farther ahead and make some new plans.
I can’t wait.
Are you with me?
Well done Joan. The hardest part of any plan is sticking to it through the rough patches. If it was always easy, we everyone would be debt free.
Jason
Thanks, Jason! We just keep plugging… sometimes slower, sometimes faster, always forward!
Congratulations, Joan! That is a huge accomplishment; it must have felt amazing to be able to clear that tax burden before the deadline. Your “go forward” plan sounds solid, too. Since I’m fairly new to ManVsDebt, I don’t know how you handle larger expenses that don’t occur monthly.
I use a technique that I call saving for “Future Capital Expenses.” Ever since I started doing this more than 10 years ago, I’ve never wondered where the money would come from for insurance premiums, property taxes, vacations, etc, even a new car. I posted a topic on EscapingDodge.com that describes what I do. It’s in the topic titled: Reduce Financial Emergencies With One Simple Strategy. I’m curious if you do something similar.
Ree
Ree, if you’re interested in that topic, I hope you’ll take the time to check out the previous posts (you can find them all on the “Joan’s Finances” page) where I explore exactly what we’re doing! It’s too much to get into in the comments, but I’ve dealt with it often!
I’m not surprised, Joan, you seem to have it all together! I’ll check out your archives and see how you approach it.
Thanks,
Ree
It’s a great feeling knowing that no matter how much the debt shrunk by…it is still shrinking!!
Way to go!
Thanks, Katie! That IS the best part – it’s going the right way!
Impressive! Keep it up.
Thanks, Russ!
Joan,
Way to go!
It must have been hard deciding to cut back on your side hustle. Clearly, your freelance income was accelerating your debt payment. It must be tough to feel like you’re easing off the gas pedal.
Nevertheless, I’m glad you’ve made a decision and are now forging ahead with it! Life is full of difficult decisions. The key is to keep going. Your determination to pay off your debt is inspiring!
Keep it up! I’m cheering for ya!
Not too tough. My daughter’s pretty cool 😉 She makes a great trade.
Honestly, that’s the thing. If it were for any other reason, you’re right, it’d have been hard to lose the momentum. Instead, it’s almost a no-brainer!
Congratulations, Joan! Way to go! You’re an inspiration to us all!
Thanks, Mary Ann! 🙂
Your daughter is very lucky to have such a wonderful, dedicated parent. So much time is wasted in school, that could be put to better use.
I homeschooled my daughter for the last two years of high school. Best decision I ever made. I am very confident she got a better education than had she been in school She wrote all the exams like the kids in school. She did spectacularly well on her SAT’s and got into a top American college with an 80% tuition scholarship. She graduated last spring.
Thank you so much for saying that, Christina – and how AWESOME for your daughter!! I’m so happy for her (and you!)
Joan, thank you for saying that this is a marathon not a sprint. I get so caught up in everything I want it paid fast it makes me crazy sometimes. Thank you , thank you, Thank you!
Trust me when I say I do the same thing, Tina! It’s hard to keep reminding myself, but it really does help (eventually).
Here’s to both of us sticking to it!
Joan, I was going to say exactly what Tina said and I’m finding that same thing. It is a marathon and it will take time, but I am almost committed to spending that time to get my bills paid down. And to use cash.
And seeing your dedication to your daughter is pretty great. Making a great daughter is the best thing. I’m very proud of mine and what she has accomplished in 26 years.
Maureen, I FULLY agree 🙂 I am so glad you have a daughter who makes you proud. I’m halfway to 26 with mine – and she’s already pretty awesome 🙂
Awesome job over the past month! I love that you have specific goals that measurable and attainable. It’s also nice to see that you’re thinking about your daughter and not just about the money side. That can be tough to do at times.
Thanks, Jake! I appreciate that.
I have to say, if all of this (the debt stuff, everything) was just about the money, I’m not sure I could stick to it. It’s the human parts, the WHY, that make it doable – but at the same time, it’s sometimes hard to remember that in the moment! I’m very thankful to have the choices I do.
I am with you Joan!!! Things are changing around here also. The hubby paydays will go from 24 a year to 26 a year. That sounds great, 2 extra checks a year. But our paydays will be leaner per payday. The deductions will change. The hubbys company implements this plan May 17, 2013. So, the amount of money going to “prin only-mortgage note” will less per month. The hubby and I are talking, PLANNING, and seeing exactly where and what we can cut in our budget so we can keep putting more money on the mortgage. We are developing a plan WE can live by. We are running the marathon with you and continue until you can scream and party, ‘WE’RE DEBT FREE.”!!!!!!
Keep UP the great job. Follow your plan, meet your goals!!
YEAH!!!! 🙂 I am so glad you’re developing the plan – and I know exactly what you mean about the change in checks! There is something like that we’ve dealt with in the past year at my husband’s full-time job, and it’s definitely a different experience to plan for!!
Joan, We finished out last “refresher” course of Dave Ramsey’s Financial Peace tonight at church!!!! We had 8 active members. All total they saved $10,000 and some odd dollars in the last 9 weeks. All total approx. $7,000 and some odd dollars were paid on some kind of CC debt. I told them about your website tonight. They took the website down and look forward to sharing their journey with you!! The general comments tonight were: What happens now? Can we get together to be accountable to one another? Who else is in this same boat of debt? (your website) It’s exciting to know we are NOT alone.
Spending more time with your lovely daughter is time well vested!!!
Wow,thanks for spreading the word! You nailed it – we are NOT alone and it is great to have a community to stay accountable with! 🙂
Well done!
Thanks!
Woohoo! That’s great, Joan! There is something so satisfying about paying your financial responsibilities and having it be DONE… no ongoing drama or stress… just DONE. You’re doing great!
Thanks, Patty!! That’s exactly right – no ongoing stress! 🙂
Making hard decisions is never fun, but often the ones we love are more important than our income. It is always great to have a plan, and i’m sure that you will do great!
Thanks, Cassi!! 🙂
Joan you are doing a great job. I worked with a very successful entrepreneur about 4 years ago. She had started out with £35,000 worth of debt and had slowly taught herself how to save, sell and get savvy with money. Now she has not only paid off her debt but she is on her way to being a millionaire (she thinks she will hit that mark in 6 years time).
Amazing and inspirational and you could be on that journey too after all you have learned.
Thanks, Harvey! Who knows, right? 🙂
I did the same thing as I owed about 1K and then I had to send refund to trustee. So I don’t want that to happen next year. I made some adjustments that took cash out of pocket today, but tomorrow, will be easier, as in tax time!
It’s a hard call – I’m USUALLY not a fan of those “interest-free loans,” but I really, really need to not have to worry about this next year! So I think it was the right one! Good for you for making the safe choice too!