The bumps in the path on our move towards debt freedom jostled our resolve. We had no debt but the mortgage and an equity loan that had allowed us to enlarge the home to three bedrooms for our growing family. When he left his job in 2007, our income fell squarely on my freelance writing resources. It was NOT pretty. Each year the income tax refund ran out a little sooner until we were living off the credit cards.
Our struggles stem from a lack of communication that grew out of an anger issue. My husband would freak out when negative finances were discussed, so I kept our problems to myself. By the time he was handling issues better and I was bold enough to bring things up – we were in a huge debt hole again.
Find Ways to Boost Debt Freedom
• Sell it off – if you have no need for it, or you have no love for it, or if it is just in the way then let go. My husband had a Mustang GT that had been a part of his life since 1985. He “treasured” the car, but because we had no extra finances the car sat out in the yard undriveable and deteriorating with each passing year. I had already released most of my stuff (like stuffed animals and silver) and seeing him sign the title away for that Mustang gave me hope that together we would defeat debt in our lives!
• Save it up – Start with a little emergency money. The income tax refund boosts this step by allowing you to set aside a portion (in a separate account preferably at a separate back so that there is no easy access). We opened up an emergency account and stashed a little in the account for the “I did NOT see that coming” moments of life.
• Set the resolve – our income tax refund landed in the checking account and one of the last things we wanted to think about was debt freedom. There was money in the account for the first time in a long time and the urge to spend was almost uncontrollable. The way we were able to use the income tax refund to boost debt freedom was with a plan. We knew how we were going to spend almost all of the money and some of it did include a little free spending money for all of the family. Sticking to the plan has helped us maintain money in the account AND allowed us to pay down the debt we had grown over the past several years.
• See the possibility – there are a lot of fingers that could be pointed at who or what is to blame for our troubles. Pointing will not make things different. We have to choose to focus on the possibilities and NOT the problems in order to make a change. I am seeing new ways to earn more money as a writer and my husband has found a new job that allows me that time to write. We are seeing the income level rise and with each wave the hope grows stronger.
The income tax refund may not be the answer to everything, but with the right plan and preparation the income tax refund boosts debt freedom and helps push finances back into the black.