Tax Relief

Boy do we know about debt right now. We did the typical generation Y thing and bottomed out financially a few years ago. We're still recovering, but we know about everything from how to get Tax Relief from the IRS (paid that off out of 2008's refund... they had been on our backs since 2005), to how to settle credit card accounts (US Bank... finally), to how to negotiate a workout payment on the truck that we bought when we were first married, but couldn't afford, and ultimately had to have repossessed. Lots of Americans are having trouble with this right now, with the first downturn of the economy in our generation.

As Larry Bourkette said, debt isn't the problem, it's a symptom. And whether you are having trouble with the IRS or your credit cards, student loans, or vehicle payments, the issue needs to be addressed from the inside out. For us now I'm thankful that we bottomed out when we were in our 20s (23 and 25 actually) so that we can now live like noone else so that later we can live like noone else (thanks Dave). We've had multiple creditors calling us daily, had threats of lawsuits, learned how to negociate with the IRS to be put on noncollection status, and been so much a slave to the lender. The Good Book is right. We don't want to do that any more, so two years ago now we cut up our credit cards and have been slowly been paying them off. The first to go was the dirt bike loan, sold the dirt bike and that covered it thankfully. The next was a couple smaller credit cards when we sold our property and moved into a rental in town that we could afford. The IRS was paid out of both our 2007 and 2008 tax refunds. Another credit card was settled for 15 cents on the dollar out of the 2008 refund as well. Now we have Sallie Mae, Discover, 1st Financial, and USAA totalling 12K that we're working on, and the balance due for the truck that was reposessed that we are going to try and settle with our 2009 tax refund.

Next step will be to save 3-6 months of expenses (for us that is 6,000- we've gotten good at living on beans and rice) and then saving 20% for a down payment to buy a home. Dave Ramsey says that we should take out a 15 year fixed mortgage with 20% down, but we're going to do a 30 year fixed unless hubby is blessed with a huge pay increase. We are done with car payments. We drive an old, paid for car (and yes, we have to budget for expenses, but it doesn't even touch the $385 car payment that we used to have) and we're saving to buy another old car in cash so I have something to drive around town.

We are living like noone else so that later we can live like noone else. And lovin it. We are so much more at peace now that we're not spending money that we don't have. Call us weird, Dave says that's a good thing..