The Tax Man taxeth. . . .

And then he giveth back! I was pleasantly surprised by both my federal and state tax returns this year. For whatever reason, although I earned just about the same amount this year as I did last year, I received a larger refund - by about $400. Part of this is due to the fact that one of my employers is finally taking out state taxes, which helped. I have no idea what led to the federal refund, although I changed my withholdings several times last year (my human resource office must hate me) so maybe I had more taken out than I thought I did.

Anyway! Both refunds have now been deposited in my bank account, which resulted in a nice hefty payment to the student loan services. Yay! I've still got some of the state refund in my account and can't decide whether to use it to pay down my credit card (still somewhat high from the car and cat fiascos) or put it in savings or put it towards my second mortgage or student loan.

Sometimes it's nice to have more money than one knows what to do with, eh? That doesn't happen often so I'm going to revel in it for awhile before waving goodbye to those extra dollars (which, after all, were mine to begin with anyway, right?)

Frugal tax filing. . . .

For the first year EVER in my adult life, I haven't yet submitted my tax returns. I'm usually the person who sends in an electronic return on January 31st at midnight (after all of my W2's and associated documentation has arrived in the mail or in my email inbox). I can't WAIT to get my hands on my refund each year!

There was a time in the not-so-distant past that my refund would have been spent on shoes, or clothes, or trinkets, or, yes, more shoes. For the past couple of years, my refund has gone straight to debt repayment. And that's exactly where this year's refund will go, just as soon as I'm able to file!

Although I'm finding nothing about this on the H & R Block website or even anything recent on the IRS website (the last press release was dated January 7), I remember reading that I needed to wait to file, since the tax changes late last year are not yet reflected on certain forms (Schedule A) that I need to complete. So wait I will. While twiddling my thumbs and wondering how much ole Uncle Sam will give back to me this year. Hopefully enough to make a smallish dent in my student loan debt, since I was only able to send $950 in that direction last month.

One day I'll be able to count my tax refund as a nice little gift, to be used for travel or other fun experiences. For now, that money is needed to pay down the 'stupid tax' that I owe to the U.S. Department of Education. . . .

Frugal decisions. . . .

One of the more interesting topics in the U.S. economic news is this tax cut that will (hopefully) leave an additional $50 to $85 dollars in our paychecks next year. This, apparently, is due to the fact that individuals won't be paying into Social Security in 2011 (which, honestly, seems rather inadvisable given the sorry state of our Social Security system, but I'm not making the decisions in D.C., folks!)

In any case, I came across an article with suggestions for how to use this windfall. This may be especially useful for those of us who - whether currently or in our spendthrift past - may be likely to fritter that money away as soon as it shows up in our paychecks.

• The first suggestion is a great one (because I've already put it into practice with my first January paycheck!) Basically, the idea is to avoid a post-Christmas financial hangover by putting those extra dollars away in a special holiday savings account, thereby gaining a nice cushion when the gift buying season raises its expensive head once again;
• Second, how about starting a fund just for the car maintenance costs? I have actually mentioned wanting to do this, since I drive an old car and am constantly anxious about spending money on new brakes, new tires, tune-ups, etc. Unfortunately for me, I'm not sure I have room in the budget, but it's a great idea all the same;
• How about some extra education (such as a certificate or associates degree) that will put you in the running for a new, more meaningful (or better compensated) job? I'm currently working four jobs and two of them came as a result of the degree I recently completed;
  
• Medical costs can add up over the year, so this extra cash could be used to create a medical fund to pay for prescriptions and copays. Although the article doesn't mention it, I think this extra money could enhance your health by paying for a gym membership - as long as you actually use it;
• Finally, how about having some well-earned fun? During the Great Recession, many of us have felt overworked and underfunded and as a result we've replaced vacations with 'staycations'. If you feel the need to add some (inexpensive) fun to your life once again, an extra $50 to $80 a month might be just the ticket!

I'm not sure when this new moolah will show up in my check(s), and to be honest I'm not exactly wondering what to do with it - mine will probably go towards more debt repayment, since that seems like the focus of my life at the moment. I do know it might take a couple of months for human resources departments to get all the details down so we may not see it until February or March. You can bet I'll be keeping an eye on my bank account to ensure that the funds are given the appropriate home (i.e. debt!) before my spendthrift side can get its grubby paws on it. . .

Tax savings? Not so much. . . .

I'm obsessed with my second mortgage these days (as you might have guessed if you've read the past few blog entries. . . .). A couple of weeks ago, I discovered that I had only paid about $1,500 in principle on my high interest (8.9%) second mortgage in the last four years! Last week I decided to torture myself further by adding up all of the interest that I've sent to my second mortgage holder; money that I'll never see again.

During the past four years, I've paid CitiMortgage over $10,000 in interest! Granted, I would not be quite so upset about this if my house were actually gaining equity - unfortunately, it isn't, which is just adding to my feeling that each month for the past four years I've been flushing money down the toilet.

"But wait", I thought, "what about that tax deduction that is saving me so much money on my taxes each year? Isn't THAT a benefit to home ownership? Certainly, it's on every real estate agent's blog as being one of the best reasons to purchase a home".

"THIS will make me feel better," I thought to myself. So I booted up my 2009 tax return, and learned that I saved a whopping $1,700 last year as a result of my mortgage interest payments.

And guess what? Since I paid $2700 to CitiMortgage last year in interest payments, only about 20% of my total tax deduction was a result of my second mortgage payments. Which, by my math, means that of the $1700 I "saved" on my taxes, about $330 of it was due to my second mortgage interest. I paid $2700 in (mostly) interest in order to save $330? Sigh. Doesn't really seem worth it, does it?

Again, if my home were gaining equity (aside from the artificial equity I'm creating by throwing money at my principle balance) I wouldn't be quite so perturbed by the falseness of this ridiculous tax deduction argument. I guess the silver lining is that realizing this will help me in two ways as I go forward: first, I will think twice before purchasing another home based even partially on the argument that it will "save" me money on my taxes; and second, it makes me even more committed to getting myself out from under my second mortgage at this point (and eventually, out from under my first mortgage as well!)

Much as I love my cozy house, it's just not sustainable given my income and future goals. I would rather rent an apartment for $500 less than my mortgage payments and pay that additional $150 or so per month in taxes.

Holy tax cut, Batman!

Well, the latest Stimulus Plan appears to be on its way to becoming reality, which means that most Americans will see some extra moolah in their paychecks come April or May. But how much? Technically, individuals will see up to $400 more over the course of the year, while couples will receive up to $800.

I've just discovered that one of my favorite online calculators, at Paycheck City, actually has a pre- and post- 2009 Stimulus Bill calculation. Using this, I was able to see that I'll receive $35 more in each paycheck (I'm paid monthly) after the tax cuts go into effect. This is about what I expected. In fact, before the November 2008 election, a page at Alchemy Today had a tax calculator, so we could see how much tax savings we'd have under an Obama presidency, versus a McCain presidency. Now, I have no idea whether this calculator is truly accurate (especially on the McCain side). However, the results show that I would receive approximately $468 under Obama.

Well, $468 over 12 months is $39! So it wasn't far off from the Paycheck City calculator (and I'm assuming that Paycheck City is using actual figures from the text of the Stimulus Bill. . . .)

Not bad. Now all I have to do is figure out how to ensure that I plug that money into savings before I ever see it, rather than frittering it away on useless items I don't need. . . .

A frugal surprise. . .

I submitted my taxes last week, and found that my federal refund will be much, much higher than I originally anticipated. I had assumed (and my hand-done estimate confirmed) that my refund would be in the $200 range, due to the extra income from my second job. It turns out that I was off---way off---on this. Part of the issue has to do with one of my credits that is actually much higher than it should have been (due to timing---this will need to be adjusted next year), but even with that taken into account, my refund would have been quite healthy.

On the other hand, I've had to pay Oregon taxes for the first time ever. Granted, it's less than $50, but it's kind of a bummer anyway. The reason for this is that the organization I work for part time (from home, in the evenings) is based in another state. Due to this, there is no state tax withheld from that paycheck---meaning that the additional $8,000 or so I earned was basically state-tax free! What I need to do is have my Oregon employer withhold an additional amount each month to make up for this--maybe $15 or so, just to be safe.

The good news remains, though, that my federal refund was a nice surprise. I was able to put most of it into my 'internship year' savings account, which now has a higher balance than my emergency fund account! I'm feeling pretty good about this, although I'm going to continue to send as much money as I can to this account, 'just in case'. Because of the current anxiety about the state budget---and therefore the budget of the institution that I work for---I'd like to have as much money in that account as possible, just in case I'm not able to go back to full time status after my 2009-2010 internship ends. Who knows what the budget will look like in mid 2010, but at this point I don't want to take any chances!!

What are your refunds looking like this year (if you're lucky enough to receive one), and what do you plan to do with the money?

Frugal taxes. . . .

The tax season is almost upon us! Last week I briefly mentioned a realization that I recently had concerning my tax refund this year. Because my salary is relatively low compared to the money I spend on my mortgages (most of which is interest payment), I generally receive a nice, hefty tax refund. Last year's refund allowed me to pay down a good chunk of credit card debt, and add some money to my emergency fund.

This year, however, I created a little estimate of my 2008 tax refund, and determined that--because of the earnings from my second job--I'll be lucky to get even $200 back! Egads! I was counting on a healthy refund to pad my 'internship year' fund, with which I'll make up the loss in earnings I'm anticipating next year. (Note: it's amazing to me that I'm even planning ahead for this. A year and a half ago, it would never have entered my mind that I would actually be able to save enough money to allow myself to work part-time temporarily).

I've been reading articles about the latest U.S. 'stimulus package' to learn whether I can expect a 'rebate' check this year, which may help. Actually, there appear to be quite a few changes in the works that could help many American taxpayers this year:

• First-time homebuyer's credit: my prospective realtor mentioned this to me late last summer, when I was researching the feasibility of selling my house (I decided not to try just yet). The catch is that the $7,500 'credit' is actually an interest-free loan to be paid back over 15 years. There are rumors, however, that the 'loan' may be transitioned into a true 'credit', though, so if you purchased a home after April 8, 2008, you will want to keep your ears pricked.
• Foreclosure tax break: I sincerely hope none of you are in the midst of a financial crisis that resulted in the foreclosure of your home. However, if this did happen, there appears to be a (slight) silver lining to that black cloud: Whereas in the past, forgiven mortgage debt was actually TAXED, this year any forgiven debt under $2 million will be tax free.
• The standard deduction is increasing: to $10,900 for married couples filing jointly, to $5450 for singles and married filing separately, and $8,000 for head of household.
• The personal exemption is also going up: of course, it's increasing by a mere $100, but in this kind of economy, every little bit helps!
• Don't forget the benefit of free filing: if your adjusted gross income is less than $56,000, you're eligible for Free File. I use H & R Block, and have found the website to be user-friendly and accurate. There are many companies that can help, though, so go to http://www.irs.gov for more information.

Most of these changes and new benefits don't apply to me, unfortunately. And it sounds as if any new stimulus package will result in lower payroll taxes, rather than a lump sum payment, which may make it more difficult to save. If, in fact, our payroll taxes are lowered, I plan to pay close attention to how much this increases my take-home pay, and will have that amount automatically sent to my savings account---if I never 'see' it, I won't spend it!

The inevitable disclaimer: I'm not a tax professional, just a mere mortal trying to figure this stuff out myself. For questions or more information, check out the IRS website. I've actually found this site to have a wealth of information, especially the various electronic publications housed on the site---there's even a toll-free number you can call for additional assistance!

My housing slump. . . .

I've been considering lately whether it's a good idea to hold onto my house (which is further away from downtown Portland than I want to be) or whether I should sell it and move on. With that in mind, I asked a local realtor to come out to my house last weekend to take a look and give me her advice.

Although I won't receive the formal market evaluation until next week, the realtor seemed optimistic----more optimistic than I am, for sure! I know part of that is the fact that the realtor is a businesswoman---she needs to list houses in order to sell them, in order to make a commission and ultimately feed her family. So of course she's going to tell me that my price requirements are reasonable (I simply want to pay off what I owe, not make a profit) and that my house "shows well" compared to the competition. Actually, I do know how to make a house look attractive and cozy, so that last part isn't so far from the truth.

Yesterday, I sat and worked out the one thing I've been avoiding: If I sell my house and end up renting, how much more will I pay in taxes, without my mortgage interest and real estate tax deduction? Turns out, my taxes will double (disclaimer: I'm not a tax expert, nor am I particularly great at math, but generally I try to be more conservative when I'm inputting numbers that will lead to a tax estimate).

At first, I blanched at the thought of paying more taxes. Then I considered that, with my relatively low salary, I really don't pay THAT much in taxes anyway, compared to people like my brother and his wife. Then I wondered how I could offset those taxes. Well, I could increase my contributions to my 403(b) plan. I had been putting between 10-12% of my salary into my 403(b); in April, I cut that to 1% until my debt is paid off. Without a mortgage to pay, I could put a whopping 25% or more into my 403(b)---with money left over for travel and other fun pursuits---and reduce my tax bill quite a bit. Not as much as my mortgage interest would, but the savings would be substantial, AND I'd be investing in my retirement at the same time. By the way, I use an incredibly useful tool called Paycheck City, with which you can play around with your withholdings and view your net pay under all sorts of different scenarios.

So the inner dialogue continues. I'll revisit this next week, once I've received the formal market evaluation. My parents are coming for a visit the week after next, and I'm sure I'll bounce some of these ideas off them as well (they're not known for financial 'astuteness', but it's always nice to hear a second opinion).

Have a lovely, relaxing, Labor Day weekend, everyone!!

Rebate dreamin'. . . . .

I received my $600 rebate check on May 9th. That same day, I transferred the money to my ING Emergency Fund account, where it joined its friends and is hopefully now making babies. I was curious about what others decided to do with their checks. I found a post on Wise Bread asking this same question, and here are some of the responses:

"I'm realizing I could use some new clothes for work"

"I'm using it to pay taxes. Haha. "

"I'll be putting it toward CC debt."

"I'm likely to spend it on an iphone."

"We put it aside in our home down payment savings."

"Any rebate I get is getting invested right along with the rest of my income."

If you still haven't figured out what to do with your money, I can help with that! Well, actually, the Debt Diva can help! She has a list of suggestions on her website that may trigger you to use your money in a myriad of different ways, like:

Pay Down Debt Paying down credit card debt is the first priority for many people. A significant payment can save you hundreds of dollars in interest fees. You should spend a large portion of a windfall on debt, especially credit cards. You can use your extra cash in a lump sum payment or double your regular monthly payment for several months. If you don't have credit cards, lowering any outstanding debt, such as a second mortgage, will help save you money in the long run.

Emergency Funds A windfall is the perfect opportunity to start your rainy day fund. Many financial experts suggest two to three months worth of living expenses put away for emergencies like medical expenses, major home repairs or a job loss. You can start a fund, feathering your nest with a portion of your rebate and continue to put a modest amount away each month. Something as simple as an unexpected car repair can be a huge financial hit for many Americans. This fund will help protect your finances.

Retirement Funds Open an individual retirement account with some of your money or add it to an existing account. This will allow for a solid nest egg when you retire.

Invest in Yourself Strengthen your physical health by taking preventative action. Schedule any overdue medical exams - annual physical, dental cleaning, eye exams or medical procedures you have put off. You'll save in the long run if you take care of your mind and body as you age.

Savings If you are already debt-free now is a great to invest in the stock market since prices are low. Stocks produce nice returns and even as little as a hundred dollars can get you off to a good start.

Splurge The stimulus is designed to encourage you to spend the money and help the economy thrive. You could plan to spend at least 10% of the windfall on something fun for your family. By limiting the amount you spend, you will still have money left over to pay down debt or invest in your future.

And if, after reading the Debt Diva's suggestions, you STILL can't figure out how to spend that $600 to $1200 'windfall', just let me know; I'd be happy to help you---for a small fee! I am curious, though, for those of you who have received your checks, what did (or will) you do with the money?

Why can't the government be more frugal?

I just received a letter from the IRS--dated May 12--telling me that my rebate check was deposited in my account on May 9. As if I hadn't been checking my ING account on an hourly basis since May 5th. How much money did the government spend (and how many trees were killed) to tell me something I already knew?

I. Just. Don't. Get. It.
Why is it that ordinary Americans (like me, and probably you) are living frugally, economizing, buying generic groceries and taking public transportation in order to make ends meet, but my government feels that it's necessary to send me snail mail to inform me of an event that has already passed, and for which no action is required on my part?

In a general Yahoo search on government waste, I came across a website called Citizens Against Government Waste. According to the website,

"Citizens Against Government Waste (CAGW) is a private, non-partisan, non-profit organization representing more than one million members and supporters nationwide. CAGW's mission is to eliminate waste, mismanagement, and inefficiency in the federal government. Founded in 1984 by the late industrialist J. Peter Grace and syndicated columnist Jack Anderson, CAGW is the legacy of the President's Private Sector Survey on Cost Control, also known as the Grace Commission."

This site focuses primarily on government waste related to pork barrel projects, and even names the Porker of the Month (politicians who have shown a blatant disregard for American taxpayers).

Another website, called The Heritage Foundation (warning: I think this is a conservative site) has an interesting list of examples of government waste, including:

The Missing $25 Billion
The government knows that $25 billion was spent by someone, somewhere, on something, but auditors do not know who spent it, where it was spent, or on what it was spent. Blaming these unreconciled transactions on the failure of federal agencies to report their expenditures adequately, the Treasury report con­cludes that locating the money is “a priority.” The unreconciled $25 billion could have funded the entire Department of Justice for an entire year.

Unused Flight Tickets Totaling $100 Million
A recent audit revealed that between 1997 and 2003, the Defense Department purchased and then left unused approximately 270,000 commercial airline tickets at a total cost of $100 million. Even worse, the Pentagon never bothered to get a refund for these fully refundable tickets. The GAO blamed a system that relied on department personnel to notify the travel office when purchased tickets went unused. Auditors also found 27,000 transactions between 2001 and 2002 in which the Pentagon paid twice for the same ticket. These additional transactions cost taxpayers $8 million.

Embezzled Funds at the Department of Agriculture
A recent audit revealed that employees of the Department of Agriculture (USDA) diverted mil­lions of dollars to personal purchases through their government-issued credit cards. Sampling 300 employees’ purchases over six months, investigators estimated that 15 percent abused their government credit cards at a cost of $5.8 million. Taxpayer-funded purchases included Ozzy Osbourne concert tickets, tattoos, lingerie, bartender school tuition, car payments, and cash advances.

Credit Card Abuse at the Department of Defense
The Defense Department has uncovered its own credit card scandal. Over one recent 18-month period, Air Force and Navy personnel used govern­ment-funded credit cards to charge at least $102,400 for admission to entertainment events, $48,250 for gambling, $69,300 for cruises, and $73,950 for exotic dance clubs and prostitutes.

And this is just the tip of the iceberg! Have you noticed any abuses of government funds? Well, guess what? There's actually an eHow website letting you know how to report it! Unfortunately, the site advises us to contact our elected officials---isn't that kind of like warning the fox that we've noticed our chickens disappearing at an abnormally high rate?

Festival of Frugality. . . .

Thanks to Rather Be Shopping for including my post, "Frugal healthcare. . ." in the 121st Festival of Frugality. . .the Tax Day edition, to be published tomorrow!

The tax rebate dilemma . . . .

According to an article at MSNBC, Americans may not be spending the upcoming tax rebate in the way politicians and economists would like us to. The idea behind the rebates is to strengthen our weakened economy by bringing more money to the market; Americans are expected to spend their 'windfall' on items such as TV's, clothing, vacation travel, and other goods.

However, it appears that at least some of us may be planning to use the money to pay down debt or increase savings. With the shaky state of the economy, families are wondering if it might be better to have that $1200 or $600 in the bank rather than frittering it away on a new, fancy BBQ or car stereo. In fact, much of the money might already be earmared for increased fuel costs, which according to the MSNBC article, won't do much to help the economy since most of that money goes to our overseas oil suppliers.

Despite the hints that the rebate money might not enter the economy for quite some time, some economists are counting on Americans' inability to live frugally. For example, David Wyss, a chief economist at Standard and Poor's, says this: "Americans have an amazing ability for self-deception, and I have full confidence that they’re going to end up spending the money regardless of what they say they’re going to do with it.”

I feel a bit insulted by this comment! Mr. Wyss is saying that no matter how smart we think we are, our instinctual drive to consume will trump our intelligence. For my part, the rebate check will be going directly to debt payment. This will (if all goes to plan) more than double my monthly payment to the credit card company, and will result in my credit card debt disappearing a full month sooner than expected! Now THAT is smart, and no amount of advertising or consumption lust will convince me to spend that money on items I don't need, which were probably produced overseas, anyway.

If you haven't decided how to spend that rebate check, here are some ideas to consider:

How about buying yourself some freedom? Freedom from debt, that is. Do you carry a credit card balance? Have you been ignoring it, paying the minimums month after month? Why not pay it down (or off)? Consider the satisfaction you'll feel as you watch your balance shrink, along with your minimum monthly payment.

Split the rebate. Are you a family of four? Are you receiving $1200? How about dividing that by the number of family members and allocating the money this way: $300 to debt repayment; $300 to retirement savings or emergency fund; $300 to the upcoming camping trip; and $300 toward that new TV or other purchase.

If you purchase, buy American! If you decide the use the rebate check to buy something fun (or necessary), make sure you're purchasing something that was made in America! I know, I know, this is almost impossible these days, especially in the case of electronics or appliances. However, the only way the rebate will serve its true purpose (to improve the American economy) is to buy items made by Americans. An alternative to buying a thing would be to travel domestically---this also benefits Americans.

So, I'd like to know: what are YOU going to do with your rebate check?

Rich by 30. . . . .

Last week, while perusing Wise Bread, I came across a review for a book entitled: Rich by 30. I left a comment thanking the poster, Lynn Truong, for her review. Amazingly, Ms. Truong emailed me and offered to send me her copy of the book, with the caveat that I donate the book to my local library when I was finished. I happily accepted, and the book arrived on Saturday!

Although I had a friend visiting this weekend and was therefore busy, I was able to go through the book at lightning speed. It's truly basic, and much of the information presented will be familiar for anyone with an interest in personal finance. I commented to my friend that it would be an amazing gift for a teenager just starting his or her first job. How I wish I had had the wisdom to start saving (even just a little bit!) at the age of 16, when I got my first job!

Thanks, Lynn, for the book! I enjoyed reading it, and will pass it along to the Multnomah County Library system this week, so that others in my area can benefit from it as well.

Getting there. . . .

I've decided to start a monthly debt reduction chart, to help me stay on the path to paying off my credit cards (then it's on to the student loans and building up my emergency fund). I've had a bit of difficulty NOT spending my tax refund on frivolous items (such as clothing), but I did manage to put a chunk of money toward my credit card debt all the same.



I started February with $4,404.29 in credit debt. I plowed $1,079.63 into debt repayment (thanks, Uncle Sam, for my ginormous refund)! This leaves me with a total of $3,324.66 in remaining debt at the start of March. I'll update this chart again at the end of March to see how far I've gotten, so stay tuned!

Taming the beast. . . . .

Good news: both my state and my federal tax refunds have been deposited into my checking account!

Bad news: I've already spent almost $100 on totally unplanned, frivolous, non-necessities!

My original plan was to dump the majority (if not all) of my refunds onto my credit card debt, effectively wiping out two credit cards (at $190 and $794, respectively) and then dropping the rest onto my third (and last!) credit card. But there was something about seeing all that cash in my usually anemic checking account that made me go a little crazy!

Before I stopped, I had purchased a pair of shoes (on sale), a sweater (on sale) and a new spring top (also on sale). Do you like how I justified my purchases with the fact that they were on sale? I must have "saved" about $80 on my almost $100 worth of purchases! The guilt set in when I got home, and realized that by shopping for things I didn't need (but craved) I was sabotaging my own plans for financial independence. And that the pattern of letting money disappear from my life so quickly and for such trivial reasons is how I got so far into debt in the first place.

So, how did I tame the beast? This morning, I logged in to my checking account and started putting my money to work---on debt reduction. I paid off the two credit cards, and will put another $500 on my third card. If the money is literally gone from my account, then I won't be tempted to spend it on small, trivial things, as I have in the past.

My spending spree was a good reminder that my shopping beast is still alive and well, just waiting for an opportunity to rear its ugly head. It was also a good learning experience---in the past, I would have waited until the very last minute to pay the "boring" bills with my refund, by which time most of the money would be spent. This time, I learned to pay the bills early, to avoid the danger of spending my refund on things that won't contribute at all to my future financial security.

In student loan denial. . . . I mean deferral. . . .

Now that I can (kind of) see the light at the end of the tunnel as far as my credit card debt goes, I'm trying to force myself to get excited about paying off the $50,000+ in student loan debt I'm carrying. Granted, my loans are in deferral because I'm in school (again!) but some of the interest is accruing on the unsubsidized portions of the loans. Added to this is the fact that when I consolidated lo those many years ago, the interest rate was at 8.25%. Ouch.

So, today I've been cruising the personal finance blogosphere, looking for good articles that will get me ready to at least start paying the interest portion of my student loans (and get that tax deduction while I'm at it).

Here's a list of what I found:

• Student Loans: How to Pay Them Off and Build Wealth, by David John Marotta and Beth Anderson Nedelisky


• The Student Loan Tax Break and What Loan Brokers Won't Tell You, by Teri Newton


• A Rough Guide to Repaying Student Loans, by SJean at StackingPennies.

I'm sure there is more to be found, and I'm going to keep my eyes peeled during the upcoming months. Since my credit card debt won't be repaid in full until next fall, I've got some time to find my motivation for this seemingly overwhelming financial task. I would love to have the student loans go away all on their own (which they may do, but I can't count on that). Until or unless that happens, I need to start finding some inspiration to start the next phase of Mission: Debt Knockout.

Credit card payoff. . . getting closer!

While sick at home yesterday, I took the opportunity to complete my tax returns, and realized that I would be receiving a slightly higher refund that I anticipated! Once the visions of new wedge sandals stopped floating above my head, I started getting excited about putting a larger chunk of this cash (my own money, after all!) toward my debt repayment.

This inspired me to list my remaining credit card debt, which can (hopefully) be seen in the spreadsheet below. . . .



I hope to have all credit debt paid off by October of this year, after which I'll start padding my emergency fund (currently at $1,000) and then work on my student loans ($50,000---ouch!) and my mortgages. By the way, at this time two years ago, I had NO credit card debt----I promise to write soon about how I squandered my financial fresh start!

I'm excited to rework this spreadsheet soon, to show the large refund amounts I'll be throwing at my debt, hopefully within the next two weeks!