Hitting the I.R.S. Lottery

The time has come, as it does every year for all of us hard working people to once again go see the accountant and square away with Internal Revenue Service. For some people, this is a dreaded event, but to others, it’s like hitting the lottery, of course on a much smaller scale for most us. However, receiving that lump sum of money from the I.R.S. feels like free and found money although we have actually worked and earned it.Being a self employed Educational Consultant I do not have the option to have my taxes taken out of my weekly paycheck. I can’t opt for the larger weekly paycheck and less of a return. I instead have to hand the accountant every piece of paper and receipt I have from the year and hope for the best come April. Most of the time this works out for the best and I wind up receiving a return just big (or small depending how you look at it) enough so that if I chose to, I could take a family of four on vacation to Disney the value plan way (which by the way, I have done in the past). This is the way I have been filing my taxes for the past four years. I have gotten used to this way of saving and spending the money throughout the year and I have to say I am getting to enjoy the “lottery win” no matter how small. This year was no exception.

So now I am faced with the decision of how to spend the money the government has decided to give back to me this year. Do I throw care to the wind and go on a vacation as I have done before? Do I save it for a rainy day activity or an emergency? Or do I do what makes the most financial sense which is to pay off some debt that has been accumulated? I decide to go with the smartest decision this year. So I sit down and devise a plan of pay off. Like most Americans I have retail credit cards and bank credit cards along with the seemingly never ending installment loans. I go onto to the free credit report site of which I am a member and check all of my balances. After I added it all up and got over my feeling of dread, I came up with an option that will actually work. Hopefully anyway. I considered the installment loans first. Those have mostly low interest rates so I have decided that I can continue paying them as I have been paying them. On time, every month. The money from my return was to go to the remaining credit balances. The store credit cards and bank card balances that have grown this year and needed to be addressed. Instead of paying one or two cards off completely I wanted to bring down my balances on all of my cards and in doing so become closer to paying off all of the cards completely. So, I divided each credit card balance by four figuring I can actually pay them off and/or down within the next four months. I made the first of the four payments this month. Hopefully this plan will bring me closer to a debt free life. This is something I know we all strive for.

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