Wednesday, May 10, 2017

Shopaholic on a Budget: Surviving Taxes

I'm so excited for this post. Never did I think that I would be excited to write about budgeting, but here I am, all giddy to share this with you. We started our budget back in January. It's been rough, mostly on me, but this past month it paid off big time!

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Whenever I hear those commercials about "it's refund season, what are you going to do with your refund?!" it makes me want to punch someone a little. Because we hardly ever get a refund. Ever. For the past few years, it was me that tipped us over the line of getting a refund, this year it was Aaron. He changed jobs in the middle of the year and it messed up our tax brackets. We owed, as usual, but we weren't expecting to owe $1,500 between CPA fees and taxes. It was rough, but with a little bit of planning and waiting, we have gotten back on track almost like the taxes didn't even happen.

Here's how we did it. We were very blessed and received an escrow check from our mortgage company. Normally we just put it in savings to help recover any loss from increased payments, but we used it to help pay off the taxes without having to dip into our savings. We were also blessed that taxes hit during the magical three-paycheck month. If you get paid bi-weekly, then you know and understand the magic of the three-paycheck month. It happens twice a year and, if you're like us and budget based on two paychecks a month, you essentially have a free paycheck. The downside is that you have to plan for it.

The third paycheck normally knocks our pay schedules off. Our paychecks end up hitting a few days after we need to pay bills. In the past, it's actually hurt us more than helped us because we weren't on a budget. We weren't paying attention to how we were spending the money and we ended up using it all before we even knew it! Then we were cutting it close on paying bills with the next paycheck. It just didn't work for us. But this time we planned! I mapped out our bills and spending from March to May. We stuck to our budget and didn't even touch the extra paycheck money until the first week of May, a whole month later. We let it sit in our checking account to help offset the difference in our pay and bill schedules. Then in May, the magic happened.

We just paid off our main credit card and put some extra money in savings. That's with paying for the hotel for a friend's wedding, buying both of us new clothes (yeah healthy weightloss!) and mulching the yard! At the end of this month, we'll be able to put our usual amounts towards debt payoff and savings and we'll be back on track like nothing ever happened. That's why you budget, people. Because you have the ability to react when big ticket problems happen and recover from them. Back before we started this budget, this would have crippled us for a few months. But with a little planning and sticking to a budget, we are back on track.

We did all this and still paid off a credit card and put some in savings!

Mulched our beds!

Celebrated our friend's wedding in New Bern, NC!
Thanks to our budget, we are back on track almost like $1,500 in taxes never even happened! Budgets suck. Trust me. The lack of regular material gain in my life is not fun and there are so many times I have sent pictures of items I want to a friend saying, "Tell me no!" But watching our savings grow  and debt shrink while still being able to do house projects and support our friends with their weddings and babies is pretty awesome. What have you been able to do because of your budget?!

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