Taxes Will Be Easier Next Year!

Did you finish your taxes on time? When we were younger, we filed as soon as the forms arrived in the mail. We always got a tax refund because we claimed only one deduction all year long and at the end of the year, we added four more. That started as a way to be certain we didn’t owe taxes at the end of the year.

As time went on, we continued that practice as our “savings” fund. It was just about the only way to set money aside without withdrawing it for some emergency like a dental bill or a car repair. Some years, when our tax refund came, we still had to use it for a dental bill or a car repair. There were a few years, though, when that tax refund was a boon to our income and we’d do something amazing like pay off the balance on a car loan!

There were also at least three times in those years when we were claiming multiple dependents in the form of our three children, we actually took a vacation. We loaded our kids in the van, drove from Illinois to Florida, and stayed with my Dad and step mother in St. Petersburg. Seven of us stayed in a two bedroom house, but my Dad and step mother were always gracious about us crowding in with them. We visited Disney World twice and the third time we visited Sea World and a bunch of smaller attractions like Weeki Wachee Mermaids at Florida State Park.

Eventually, I realized while I was giving the government my money to use and hold for free, I was paying interest on car loans. It seemed smarter to me to keep the extra money in our paycheck than it was to “save” it in payroll deduction. If I added the additional money to the car loan, I was saving more money by paying less interest. That began the quest for a debt free life. As we enter the 10th week of unemployment, I am satisfied I made the right decisions.

I know most financial advisors, economic consultants and accountants believe it is better to invest extra money than to pay down debt, but I can tell you a couple of things about that philosophy:

While I am worried about the lack of a paycheck, I am not worried about a mortgage payment. I am not worried a bank will take our home. I am not worried our car will be repossessed.  That puts us in a far better place than so many other people today. Soon, a lot of people are going to be facing some dire circumstances. Several of our friends have been without a job for months now. One has been idle for six months. Several more are preparing to be furloughed one day a week. My thoughts are with all of them and as Bill continues to search for a position, we are passing other people’s resumes’ around like fans at a July parade.

Still, we are all an optimistic and resilient group. I absolutely loved my friend Scott’s observation on Facebook yesterday. Scott said, “I'm sure everyone has different opinions about The President’s tax return....good or bad. All I have to say is it must be pretty cool to put 1600 Pennsylvania Avenue as your address and US President as your occupation.”

Why do I hear Monty Python in the background?