Thursday, February 12, 2009

A Huge Chunk Gone!

Our tax returns are coming in and hitting our bank account over the next few days. We already got our state return back, and federal will hit tomorrow. We were expecting a larger return from MI than we ended up getting because we didn't do our property tax piece correctly. Thankfully the state was kind enough to fix our error and adjust our tax return accordingly *snicker*.

So this is what we did with our tax returns:

1. Replenished the emergency fund
2. Paid property taxes
3. Paid $4000 towards our van loan

Not as much as we had hoped, but still very significant. We were REALLY counting on paying the van off completely, but it just wasn't in the cards this time.

Matt and I went back and forth a little over what direction we should take with the money, and I felt very strongly in replenishing the emergency fund first. We've tapped it a couple of times and it was looking pretty slim, and when else are we going to get an opportunity to do it all at once rather than holding up our snowball for a month or so? It just seemed to make more sense.

Yesterday we also found out that our house payment is going up about $200/month because of losing our Homestead Property Tax exemption. Not only do we take a hit on our state taxes by not being able to claim our property taxes, we are taxed at the much higher rate. We are fortunate to be living in Matt's mom's house right now that is completely paid for, but we are paying the property taxes on it. Unfortunately, that puts us in a position where we are paying taxes on 2 houses in MI, neither of which are at the exempt rate. Go figure.

So my logic was that if things fall apart and this $200 increase puts us behind, we NEED that emergency fund fully stocked to be able to fall back on. We talked through it, and even though it wasn't what Matt really wanted to do, he agreed to it.

I think we both just need to come to terms with the fact that we didn't hit our goal this month of paying off our van, and that's a little blow to the momentum, but we did accomplish 3 pretty significant things. We have to celebrate ALL victories and I declare VICTORY!