January and December are tough months for us in terms of spending. As you’ve read, our homeowner’s dues are due 10 days after the new year begins, which leaves us zero time to recover from Christmas spending.
All this has left me wondering if I’m doing enough to impact the revenue side of the debt equation.
There are the obvious things, like picking up a part time job, but in my career, part time work is not very practical. My wife has her own small business, but revenues there can be very sporadic, so all of my debt and budget calculations are built around my income alone.
That being said, I decided to take a look at my IRS withholding allowances. What’s that you ask? Remember when you got your first job and your employer told you to fill out a form, among many others, which was meant to tell the IRS how much to take out of your check? You had no idea what that meant, so you probably asked your parents and they most certainly said, “claim 0, you don’t want to owe the IRS money at the end of they year!”
So while that is true, you don’t want to “owe” or underpay, throughout the year if you can help it, you don’t want to overpay either! Money that you overpay can be going directly toward your debt attack. So have a look at your withholdings, and use this nifty, albeit slightly intimidating, online tool to help you judge the number of allowances you should actually be claiming:
http://www.irs.gov/individuals/article/0,,id=96196,00.html
Hopefully you’ll find a few extra bucks in your paycheck! I readjusted mine about two weeks ago, so I’ll let you know what the practical effect is in a couple of weeks when I get paid again. Good luck!
By the way, this is not to be taken as tax advice especially because I’m not an accountant or tax attorney, it’s just something that I’m trying. If you do have any tax questions, please contact your tax professional.
2 comments:
This is a great post on how to raise one's paycheck.
I think those people suffering from a lot of debt can do themselves a favor by hiring the best bbb top 5 debt consolidation companies around. Why not? But first I would highly recommend talking to a qualified counselor. Yes, get free consumer debt counseling services from a great company.
Your wife needs a job, possibly two. She contributed to the debt, she needs to contribute to the deleveraging you're going through. Her business isn't generating enough income to significantly impact what you owe, so she needs to look for a salaried job. It may just be for a few years - just long enough to pay off your consumer and HELOC debt and set aside $20,000 or so in savings to get at least one year of college covered for your son.
Just saying.
Debt is a nightmare. We started deleveraging in 9/07, as soon as we realized that the economy was going to hit the skids. We're three quarters of the way through and can't wait to be done.
Good luck with your efforts.
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