I hope everyone had a great turkey day. Since I only worked 3 days last week, I will only get paid 60% of what I usually make this week. Oh well, such is life as a consultant.
So I have been talking about 3 goals this quarter: Max 401(k) – done, pay off all medical bills, and not take on new debt – so far so good.
With the medical bill, I entered November with $5,909 and leave owing only $1,853. I paid off another $4,056. When I say I have paid off $4,056, I mean I have it in account to be shipped out. .So I told my wife to call the hospital this week and charge the balance on a credit card (somewhere around $12k).
Why am I charging before I have only the money set aside? It really has to do with taxes. After a certain amount, I can write off a certain amount or something like that. My CPA knows. In any case I want to maximize that deductable if I can. Other wise, I would have probably sent the check after Christmas. In any case, I'll have the money before the credit card statement comes. More of a timing with when the cash will be available and when I can cut a check, just want to make sure everything clears in 2008.
Sometimes I wonder how excited my wife is to the fact that we are almost out of debt. Now, my wife is a low key person and plays things very close to the vest about everything. So imagine my surprise when she started to tell her parents that all of our debt but the house was going to be paid off in December. She also retold this to her sister.
She is also really into our goals for next year and when they will be accomplished. I even brought up investing in real estate and she didn't even dismiss it. She just asked a couple of questions. She was neutral about the concept which was far better then where she was when I last brought up the topic.
So, next goal on the horizon is to top of the emergency fund. My wife wants 8 months, my wife will get 8 months. I look at the emergency fund as security and whoever has the most months wins.
As for no new debt – one holiday down and one to go.
Goals Review - November
December 1st, 2008 at 06:12 pm
December 1st, 2008 at 06:33 pm 1228156423
December 2nd, 2008 at 01:23 am 1228181035
I understand about paying the medical this year. Medical expenses have to be a pretty high percentage of your income to take a deduction; most people deduct nothing for medical. By paying this year, you're likely getting a tax benefit that you would not give if you waited until '09.
December 2nd, 2008 at 06:08 pm 1228241337
I'm with her on the emergency fund month. Six months is good but 8 is better. It all depends on your employment situation. My husband is self-employed with no benefits so we have to have more saved up than most.
December 2nd, 2008 at 07:59 pm 1228247998