New Budget

[LuxLiving]

I understand Time To Save that you are wanting to allow yourself some time on this new track record you're building!

It IS good to get stable footing and know that you've got yourself under control and still have usuable oxygen before jumping back in the water for the next step.

Just remember (and I think you're getting it) that the folks on here are truly trying to help you...and the logic from many people who are currently on a decent financial footing are advising the same course of action.

We don't want to owe the government any more than you do....we'd just love to see you flying free towards your goals with as much wind in your sails as you can legally get! And ONE of the ways we got to that sound financial footing was when we saw we were facing the precipice BECAUSE we were being overly generous to Uncle Sammie was to back off on that generosity. Yea, give him his due, but no more!

Of course you already know this -- but the way most successful people get that way is to copy those that are already being successful. To reiterate what others have said is to get some of these payments taken care of/and do away with the idea of frivolous mistakes is to make them automatic.

Auto-draft -- It was scary to me at first. I thought there was no way we could set our payments on automatic - fears of bounced checks kept waving it's ugly head. BUT, when I did get a bit ahead (where you are now with the large tax refund lump) I set it up and it's been ticking along fabulously now for quite some time. Amazing what we can do when we just trust BUT verify. Direct deposits along w/auto-drafted payments WITH MONITORING is a wonderful thing.

Does your bank allow you to go online to monitor your accounts?

Hang in there girl, you are getting it!!!

[kv968]

Originally Posted by timetosave

I hope I'm not stacking the odds against myself. I think I've bettered the odds since coming here. I have come a long way. The decisions I've made in the past few months of being on this board were all based on my level of 'comfort' I've gone from being behind to being totally caught up on current bills debts and starting the new year putting away money in a Mini EF. I was able to stick with my plan because it did not hurt (mentaly as well as financially). I will keep an open mind about the change, it might happen some time this year...it might not, but it is not going to derail me in anyway from achieving my goals.

I've read through all the posts and you've come a long way. I applaud you for that I didn't mean that coming here was stacking the odds against you. I meant that by not freeing up some of those overpaid taxes throughout the year, you're just making it unnecessarily harder on yourself to pay debt and start saving, that's all.

[disneysteve]

Originally Posted by timetosave

Once I feel more financially savy, once I have money in the bank and feel a little more secure, once I have some of my debt paid down and have more room to breathe (I'm getting there, much better now than when I was approx. 6 months behind on my car payment) I will re-think this. Right now I'm simply not comfortable with this option.

I will keep an open mind about the change, it might happen some time this year...it might not

I was about to type how this wouldn't work but as I was typing it dawned on me that this would indeed work...I need to look into this more...maybe I am closer to chaning my deduction...

I think the absolutely most important thing is what you've expressed here. You are open to change. You are willing to look at things differently than you have looked at them in the past. You are willing to consider new ways of doing things. With that attitude, you WILL succeed. You didn't get in your current situation overnight and you won't get out of it overnight either. If a few months from now, things are much more stable, as I think they will be, you will probably feel much more comfortable adjusting your witholding at that point. That sounds like a great plan to me.

[greedy4chips]

I haven't checked in on you in a few months. It looks as if you are getting a little bit ahead of your debts by working on your budget and prioritizing your debt payoffs.

When we were in debt a few years ago we used our big tax refund and changing our deductions as a real "magic pill" that helped our situation immensely. We had a 9k+ return and another $750 by changing our deductions to 11 (which is what we actually were allowed by the calculations).

I understand that this may not be what you want to do, but it is just an example of what worked for us and many others.

Cornell University is a very lofty goal for anyone at approx. $25,000 per semester for undergraduates. Even if you could save $1000 per month for the next 5 years with a 10% return you would only have enough saved for perhaps 3 semesters. So by those numbers she would have to have a large student loan debt when she graduates, of around $125,000. Of course any grants would reduce this amount and also any scholarships.

There is good news though, she has time on her side. She needs to start looking into what grades are necessary to get admitted to Cornell (very good ones). What scholarships she could qualify for and what she could do to qualify for others. Many scholarship recipients do community service type work, which always looks great on any application. She should start applying for scholarships now. The reason is simple, she will gain a lot of experience writing essays for the applications and as she begins to win some of them she can see what seems to work and what doesn't seem to work.

Just so there isn't any confusion about how I worded my post, I am just stating what I have read as good path to take when trying to finance college.

I also see you having the vehicle paid off completely in 14 months if your numbers are correct and you do the changes to your W-4 to fully maximize your take home. You could put $1500/month towards that badboy and then when the balance is $0 you will have that $1500 to put towards college or other debt in whatever fashion you choose.

I have a great theory on debt...shoot whatever comes down the road first. Retirement is the furthest off and you wouldn't be the first person to wait until late in life to start socking away money for it. DDs college expense is the next farthest off and if you had more time I would say the growth of starting to invest for it now would pay off, but IMHO you just don't have the financial position to attack everything and do it properly.

Money put into paying off the vehicle can always be recouped by selling the vehicle in an emergency. Money put into certain investments may not be available without penalties or loss of value (vehicle too).

Good luck with whichever path to debt relief you choose!