Badly Managed Taxes
I've received my tax return and it has been spent. Money in, money out. Actually it was spent months ago when I accrued the credit card debt that I've been working to pay off for the past year but that is besides the point that I'm attempting to make.That point actually is, if you are getting a tax return then your taxes have not been properly adjusted. Every year millions of Americans loan massive amounts of money to the US government for free. Each penny that is overpaid to the government is a free year-long loan. At the end of the year citizens complete their taxes, the government figures out how much of the citizen's money it has been holding, and returns that money to them (without interest).
Effort and Reward
I'm in the same boat. My taxes are not properly adjusted and I realized this when once again I received an appreciable tax return. What would I have done with that money if I received it throughout the year? Likely the same thing as I was working on paying off my short term debt all year. Would that have been better than receiving a lump sum? Yes, as I would have paid down more of the debt throughout the year and therefore paid less interest on it in total.
This is one of the things that I think stops most people (myself included) from realizing extraordinary outcomes. I'm not concerned enough with the little things, the small details like my tax withholdings. I let a lot of stuff slip by. Maybe I break my rule about eating out only once a week and go twice. Perhaps I leave my computer on when I end up on the couch reading a book for an hour. I might have purchased a luxury shaving soap off of Amazon once or twice and allocated it to the general part of the budget instead of my own chunk of discretionary funds.
And there it is, little things end up as a large pile.
About those goals....
That brings me to the Spring, the start of the year, new beginnings, fresh paint, yada yada. So what do I want to get done?
#1. Pay off the credit card - DONE! The fight is finally over and the cards are all empty. I should have never let a balance accumulate in the first place but getting the balance taken care of was the most important thing I could have done.
#2. Pay off at least 1 student loan - In progress. I may even be able to get this accomplished this month if things work out correctly. These loans are the largest debt that I have (considering the house as an investment) and they need some attention now that the card balances are zeroed.
#3. Invest 10% of after tax pay - Working on it. 10% is a lot when you are stretching to chop down debt. This is another one of those little things that gets me. In the long run, I would be better off paying down the debt but I enjoy investing so I'm doing that at the same time. I've read some really great information recently describing people who have created retirement income streams and they were specifically paying attention to what percentage of their take home pay they were investing. I've started looking at that myself and it has really stuck to me as a goal.
#4. 800 credit score - In progress. I've been floating in the mid to high 700 range all last year. With the renewed focus on paying down the debt I'm certain I'll hit 800 this year.
#5. Pay Attention - Working on it. It is hard not to let the little things slip in and pile up again. Harder than I expected it to be actually. That said I'm on a bit of a role coming into 2017 and I'm going to try to keep the momentum up. I may even adjust the taxes but overall I just need to pay more attention. Be more active in making things happen. That is why I started writing on the blog again. I want to make this happen. It all starts here, with Spring.
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