I feel like a crazy person. This month has been a total whirlwind when it comes to our finances and I’m not going to lie, no matter how in habit I am with saving money, I do not and probably will never like watching the money get pulled out. And I definitely start feeling queasy when the savings account is close to getting drained.
So what happened?
For those not in the United States, you may not be aware that the month of April, is tax month here in the U.S. For many Americans, they get a refund check in the mail and then they go have fun with it or if they’re super awesome will pay off debt or save it.
But, for those of us that are self-employed, it’s a different story.
We owe taxes – meaning we have to write really big checks to the government. And not only did we owe taxes from last year, but we had to pay our quarterly estimated taxes for Q1 of 2017!
Then I forgot about something…
Here in Georgia we have this thing called Ad Valorem tax or also known as “the birthday tax”. It’s a tax we have to pay on our cars on our birthdays (happy birthday, right?). Now the tax was done away with in 2013 which means that on my car we don’t have to pay it because we paid the tax when we purchased the car.
However, my husband’s truck that we’ve had for 12 years we still have to pay the birthday tax every year. And we still have to pay the registration/tag fee every year on our vehicles and trailers.
Okay, so the car tax part I didn’t forget, but what I did forget was that our vehicles have to have emissions BEFORE you submit payment for the tax and tags. The big problem is that now our payment is late because the state sent back our check stating that we have to submit proof that our cars passed emission testing.
I mean, it’s not like this is my first rodeo ever when it comes to this but for whatever I totally forgot about it and that error is going to cost us, big time in fees.
So what has this resulted in?
It’s resulted in us forking over nearly $10,000 in one freaking month!!! When I tell you that my stress levels have been high, I’m not kidding.
Thankfully, I have a business savings account set up where I set aside money for taxes so that took care of a huge part of the burden but the problem was, I had miscalculated my taxes owed…by a lot. So I didn’t have enough set aside and so we had to drain our slush fund plus pull money out of our auto fund…which is for cars, not taxes. :-/
It makes me weak in the knees to see how much money we don’t have in those accounts. But then again, I am thankful that the emergency fund is still intact and wasn’t touched.
So if you want to learn an important lesson on why you need to have savings accounts for your savings account, learn from our mistake of miscalculation and realize that our financial picture would look incredibly different if we didn’t have that money set aside.
Our financial picture would look incredibly different if we didn't have savings accounts for our savings accounts.Click To Tweet
So what does this mean for us now?
It means 1) we are planning wayyyyy better for taxes than we were so when we have to pay our Q2 taxes we’re more prepared and we’ve worked with our CPA to get our estimates set up based on our projected income (instead of using last year’s income as is the standard practice).
2) We are tracking every penny right now and tightening our boot straps. I’m forcing myself to only shop at Aldi for groceries instead of shopping at both Aldi and Kroger. Which means there are certain items that our household will have to go without. I am trying to convince my husband of doing a no-spend month but we’ll see.
3) I still have a business trip planned and we still have a family vacation planned but we had to hit pause on our (as in my just me and my husband) vacation until we get those accounts back up a little.
4) We know that this is just a hiccup. It’s one hell of a hiccup but it’s a season and it will pass. This is the advantage of being debt-free – we get to decide how tight we want to tighten that bootstrap because we don’t owe everyone a bunch of money.
The craziness about all of this, is that March was the highest earning month I’ve ever had with the blog. I earned over $6,000 last month – which is just crazy to me! (If you want to see a list of the three classes that I took to help me reach this feat, head here.) And then BAM! We ended up having to fork out a ton of money both expectingly and un-expectingly.
And in case you’re wondering, that $6,000 was gross – not net – so that doesn’t include my expenses for keeping the blog running and for paying my assistants. Also, we reinvest a portion of the blog’s earnings back into the blog and donate some to charity so we don’t actually “get paid” the full amount I earn in a month.
Another crazy thing that happened is that Digit, a savings account that we used and loved decided to start charging a crazy amount to use their once free service. Now don’t get me wrong, I’m not mad that they decided to start charging – I get that folks gotta make money, I’m aggravated by the super high cost they decided to go with as it made the service no longer the best option.
Buttttttt, God always opens another door and this caused us to go looking for something else and we found something that so far, we absolutely love. As this program is actually helping us get closer to our investing goals. The program is Acorns and instead of a savings account, it’s an investment account that will round up your debit card purchases and invest the change.
Now, trust me, I know we’re not going to retire by just investing our spare change but this at least gets us closer to building our wealth by making our spare change work for us – longer.
Okay so that’s just our little update and why I’m not perfect with money. Life happens.
No matter how rich or poor you are and no matter the season of life you’re in – life can and will happen. So if you haven’t set up savings accounts yet, please do it today. I’m a huge fan of your emergency fund being at a bank that’s different than your usual one (like an online-bank) so the money is a little more “out-of-sight, out-of-mind”. But your other accounts can be at your normal bank so long as you trust yourself not to pull from those for every little budget mistake.
Have you found yourself in a crazy financial situation lately? If so, how’d you pull yourself out?
Need help setting up a budget? Here are some posts that may help you:
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