After an excellent day of football and the UFC last night I admit I couldn’t sleep. Typically, there are two things that keep me up at night. One is my research. If I have an idea that I want to get going I want it to be morning so I can get to writing. The second thing is worrying about money. I fully admit I am a worry wort, perhaps too much (or at least that is what Mrs. ROB would say). But as I was reflecting on last year’s finances and thinking about the upcoming tax season I just got this huge feeling of dread.
I mentioned a couple of posts before that i am expecting two large expenses over the next couple of months. One of those expenses is some insulation we are putting into our house. As it turns out this isn’t a very well-insulated house. We got an energy audit from our local energy company and with a bunch of discounts it is going to run us about $2800 for insulation. Normally, the cost would be $6000, so I am feeling pretty good. I know this will save us money in the long run. Even though we don’t heat our house that much (65 during the day and 62 at night) our utility bills have been way too large or at least for my tastes. If this cuts 20% off our energy bill it will be worth it. And also worth if we resell the house. I have the money for this expense so it isn’t that big of a deal. I mean I don’t like shelling out that much money in one chunk, but it has to be done.
No the big expense that keeps me up at night is our taxes. I think we way underpaid this year. To the tune of upwards of 7-$10,000. And frankly I am not sure how. I mean I think I do know how. My wife and I both claim zero exemptions. However, Mrs. ROB doesn’t have any deductions from her paycheck and she works at three different places. Together, they give her a nice paycheck throughout the year, but don’t calculate taxes as one employer so her tax liability isn’t going up as she makes more money. Secondly, at my job if I do extra work (e.g. teach extra courses) it is recorded as a separate contract. Technically, it is like having a second job at my full-time job. And in doing so, they don’t tax it as much as my normal salary. As such, not as many taxes are taken out.
At least I think that is what is going on. Last year we owed the government taxes to the tune of $3000. But that was because Mrs. ROB and I didn’t claim zero exemptions. I thought it would be different this year. And after calculating some items and deductions I don’t think it is enough.
The good news is our income went up. But our tax with holdings did not, which creates this huge tax bill.
I am not so much upset about the amount of money we are giving to the government as to the fact as I am unprepared for it. I am not sure what to do? Do I take the money out of our emergency fund? Do I set up a payment plan with the IRS? Do I pray for some kind of inheritance?
Here I am trying to finally commit to paying off debt, reach financial independence, etc and then we are going to be hit with this. I have no one to blame but myself, but all I can think of is how to get out of this situation and how did I get here. When this happens (and it does sometimes) I think about all of the rest of the debt that I have, Mrs. ROB has, and the like and I just think to myself when will it ever end.
I don’t usually give specific numbers on our monthly budget (maybe down the road and I think I am a little embarrassed) but between the two of us Mrs. ROB and I send out over $3500 in debt payments every month. That debt includes student loans (a lot), mortgage, car loan, and personal loan. This money doesn’t include things like utilities, food, gas, some form of entertainment, or any kind of future investing.
I just see this money being flushed down the drain and it drives me crazy. Then if you add a monstrous tax bill on top of it I feel like giving up. I think that this blog was stupid. Who am I to talk about finances? What do I know?
Yes, I know that I have a lot of good things going for me. I have a wife I love, a job I adore that gives me purpose, a great family, a great dog, a brand new house, I might get to travel to Europe this year again, good friends, food in my belly, I think I am respected among my colleagues, etc. I have all of that, but the negative side of me then takes over and tells me what a moron I am.
How could I not see this coming? You have a Ph.D. for pete’s sake? What are you an idiot? How could you let yourself get into this much debt and this much into taxes?
So today I am having a woe is me moment. There are millions of people who might like to be in my position and have it worse off than I do. I get that, but it doesn’t help me in this moment. I want this debt gone. I want my taxes paid. I just want to be free from this millstone (that I created) around my neck.
This is only temporary. I will get over this and I will plug away. I will get to financial independence. I may be dead by the time I get there, but I will get there. But for now it seems like there is no light at the end of the tunnel.