How Do You Spend Your Tax Refund?

I finally filed our taxes tonight. You would think working at H&R Block that I would have done them sooner. But no, I procrastinate. Having four children and the Making Work Pay Credit give us a pretty good chunk of a return. If it weren't for the kids we wouldn't get anything back. We don't have a lot taken out of the paycheck. Better to have the money in hand each pay period than to loan it to Uncle Sam and get it back at the end of the year. Because of the kids our tax liability is low to zero every year which we love.

After I filed I sat down with a notebook and my return and budgeted our refund. Now I'm not going to tell you how much we got back total but I will give you some idea of what we are going to do with it.

Each person who worked this year will receive up to $400 back on their return. If you didn't work or worked very little you will receive up to $400 too. So I decided that since the President wants us to spend some money in this poor economy we should split the amount we will receive and use it as blow money. I have lost 27.5 lbs so far and think that a new spring wardrobe on the government is exactly what I deserve. Well of course Mikie doesn't., so we compromised. I can spend $100 on clothes, he gets $100 for whatever he wants. Hopefully clothes, cause he's lost 2 pants sizes too. But nonetheless the rest will purchase new living room furniture and I can move the money I was saving for it to something else.

The next thing we agreed on was to take the amount we received from the additional child tax credit and split it between the four kids mutual funds for college. It won't be a huge amount but it will help in this year’s contributions.
We received a month's worth of Parent's Day Out fees in the daycare credits so that will be budgeted for PDO. Which will free up some money in the monthly budget.
Then we had about half of the refund left. I was thinking I would use it for school, my teaching license runs out next year and I've only taught 4.8 years of the 5 years that I needed to teach on this license. That's what 4 kids in 4.3 years gets ya.

Anyhow, after talking with Mikie we decided it would go into the used car fund. So I'm keeping my eyes open for a newer Suburban. As for school, Mikie will graduate in May and we still have money saved from his degree. I can also use military spouse options. Now I just have to decide on what classes I want to take.

So I know that most people use their refund for vacation, to pay off bills, or buy a car. But what will you do with your tax refund? Leave me a comment and let me know!

How Do You Carry Your Debt?

I’ve been asked to speak next week to a community group about our family’s journey to being debt free and to share some ideas that will help others. As I was writing out my speaking plan I noticed my three year old stuffing rocks in her back pockets. She kept saying, “Please turn them sideways mommy.” Her pockets are not wide enough to turn the rocks sideways so they had to go in the best they could. It reminded me of a friend who had started Financial Peace University several years ago when we first started teaching it.

My friend’s family had been in debt for a long time. She was ready to be out of debt but her husband wasn’t ready to get on board. They have several children, in fact they could be the modern day Brady Bunch. She started the class, came the first week, called two days later to tell us she had taken a part-time job and would have to work on class nights. The next time we taught the class she came for a class or two and her second part-time job conflicted with class night. The third time we taught the class she didn’t even try to come because she was doing Financial Peace on her own. She had read the book, listened to the cds and worked out her budget and plan. She came up to me one Sunday night at church. “Here,” she said handing me her purse. I looked at her like she was crazy. Then I dropped her purse in the floor. I didn’t expect it to be heavy so I had just took it from her. Before I realized it had hit the floor she began to laugh.

I asked, “What in the world have you got in there?” “Rocks,” she said nonchalantly. Before I could ask anything else she continued. “Those are my burdens, my debts. Each one represents a credit card, medical bill, student loan, car loan and the mortgage.” She had chosen rocks by size depending on the amount of debt. She had used a Sharpie marker and labeled each rock. By the time I held her purse she had paid off three smaller debts and removed those rocks. Once paid off they were placed in the creek behind her house to be washed away.

I encouraged her as she spoke to hurry and get rid of a few more of those before she messed her back up. I haven’t seen her the last few months, she’s usually working on Sundays. But the last time I ran into her she was working fervently to get rid of a few more of those rocks.

As I watch my three year old trying to carry around her rocks. I watch her pants fall down and she pulls them back up. I think about the debts that people carry. The debts that pull you down like those rocks, sometimes their heavy, sometimes you slip on them. But please don’t let them weigh you down. Use those rocks to your advantage. Carry them not with worry but with confidence that this year you will start to send those rocks down the creek. Start with the smallest ones first.

If you’re a visual person like me fill your purse with rocks. Every time you go through the drive-thru or stop for coffee you will see those rocks. They will be a reminder that it’s the little things that get you out of debt.

So I've been blogging for the last few months on www.knoxmoms.com as budgetingmomma. I decided that I would also start posting them on this blog also. I hope that it helps someone out. Here is the latest.

When the new year approaches many people will set their New Year’s Resolutions. In our family we set 3 goals per person and as a family for the year. Some are short term like Mike coming home from his deployment. Others are long term, saving for a first time trip to Walt Disney World during fall break, potty training the last of four children.
As you set your New Year’s Resolutions or goals think about your finances and were you want to be financially this time next year. Do you want/need to be debt free? Do you want to purchase a new home or car? Do you need to start saving or paying for college or retirement? Do you just want to have money leftover at the end of the month?
When I read a book or magazine I like to take notes in my reading journal. Below are 10 ideas that I’ve read about or come up with on my own from my journal. You might want to think about them as you set your resolutions and goals. These are great for family meetings.

1.List the three most important things to you today.
2. If money was no problem, list three things that you couldn’t live without.
3. List three things that money can’t buy, that you can’t live without.
4. What is you view of money? Your husbands? Your kids?
5. How much money in the bank would make you content?
6. What is your ideal financial situation in 5, 10, 15 years?
7. If you had $1000, what would you do with it? (This will help you see where your priorities are.)
8. What could you do without if you suddenly found yourself in a financial crisis?
9. Are you willing to track your spending and work on a budget?
10. Are your marriage and kids worth it?

I hope that you will take these lists and answers to the questions and work on getting your financial house in order. We’ve all heard that 2009 will be about change. There is no better way to see change in your own home than through your finances. Less stress, less clutter from materialistic items we don’t really need, more time together, stronger relationships. Hum, maybe some more goals for 2009. See how it all goes together?

I wish each of you a very Merry Christmas and a Blessed 2009. See ya next year.
Michelle