We try not to think about the money being taken out of our paychecks each week for taxes. Even though Keri's Dad is a CPA, we consider ourselves adults and we've seen both seasons House of Cards we still don't really understand how the tax system works. But we recognize it's a necessary evil in order to help schools or something? Instead of getting angry with our government for taking our hard earned cash, we've accepted the fact that 75% or so of what we earn is really all we're getting.
When tax season comes along we're not awaiting a return of what's "rightfully ours", we treat the return as a bonus. Whatever money we get back after filing our taxes is treated with special care and goes towards things that REALLY MATTER. At this point in our lives what really matters to us is getting rid of our debt.
Embarrassingly, Keri follows Dave Ramsay's Instagram. Each week he posts a video of someone yelling out "we're debt free" with a caption like "Sally and Mally paid off $80k in 3 years!" And each time Keri gets annoyed and says "I hate these people... but also I want to be these people". We've come to realize every journey to being debt free is going to be different, and annoying to an onlooker (thanks for reading our blog). If we ever want to yell "we're debt free" we have to figure out what works for us and stick to it. Part of that is not allowing the allure of "extra money" to trick us into spending.
When it comes to tax returns or getting a bonus of any kind, like the ones we are fortunate to be receiving this month, we've trained ourselves to look at them as if they don't exist. The secret is to think of it as fake money, it can't be spent in real places. No dinners out, no movies and for the love of God don't even think about Target. We make a plan ahead of time and plot out how to use the money so when it hits our bank account we don't immediately spend it on a new floor lamp (or whatever people buy at Target). We decide how much money should be put towards debt and whatever is left over stays in our account. Saving 10% is a good standard to use in these cases. We only get a tax return once a year so we need to make it count.
This month we are trying to make a dent in Dylan's Citi credit card. Yes, that stupid thing is still around. We've positioned Citi as our mortal enemy this month. So 90% of our tax return, work bonuses, and any money that Dylan doesn't spend on pistachios will be shoved down Citi's throat. We're pretty confident that by the end of April Citi will be dead.
After a short memorial for Citi we will put all of our anger towards the next bill in line. Sticking to the snowball, that means we will start paying off Keri's student loan by paying a total of $451/month (up from $200). Holy ship, this snowball thing is working.
Below is a snapshot of our snowball chart from March. Right now we're in pummel mode. Head down, dukes up. It's going to be a blood bath, we're coming for you Citi Card.