Paying off Bills with Income Tax Refund

Well, it's tax season. For some of us that means paying in, while others get a refund. Somehow we ended up getting a nice chunk of change this year. My husband and I decided that we would pay off all our credit card debt and save the rest. We paid over $6000 on credit cards and are now debt free in regard to credit cards. The only debt we have left is the van loan and school loan. Since, we would like to get a house built on our land as soon as we can, we have decided that we will save the rest for a down payment.

It feels really awesome to not have the weight of all that debt on our shoulders anymore. We were spending about $200 on credit card debt a month (we always paid extra) and now we have that money to put in our savings each month. I was also able to add $450 to our emergency fund so now we have $1000 in there.


Even if you are only getting a small amount for a tax refund, you can use this amount to reduce your debt. You can either use it for your highest interest debt or your smallest debt. Paying off your smallest debt first gives you a sense of accomplishment when it is paid off. As an added bonus, you also now have that amount to put towards the next debt to pay off. This is called snowballing.


What are you doing with your tax refund? I'd love to hear from you.

Online Bill Pay Saves Me Big Bucks!!!

A few years ago we started using online bill payment through our old bank. It was free and so easy to do. We have all our bills set up to automatically be mailed at a week before they're due, except for the rent.

I pay doctor's and hospital bills on a weekly basis and everything else is monthly. With the money going out automatically, I don't forget about a bill and it makes my life SO MUCH EASIER! I also use Money to track what we spend, and that also puts those automatic payments in there a day before the bank sends the check or sends the payment. The only thing I have to add is any checks written or any debit card uses. We haven't bounced a check in over four years.

We not only save money by not having any late fees or bounced check fees, we also save a lot of money on stamps. We now buy a book of stamps and it will last us months! I figure we save at least $6 a month by not having to buy stamps.

Tell me what you think. Do you use bill payment? Why or why not? How much does it save you?