A lot of my favorite bloggers write about Gazelle Intensity. The basic premise is that you focus on reducing your debt with all the intensity of a Gazelle outrunning a cheetah. I’m amazed at the lengths at which some people are able to go to accomplish this. I admire the dedication and fortitude that it takes to stick with this plan.
Mark and I just aren’t those people. We have two debts, total. My student loan is $6,000ish and is direct debited monthly from our bank account. Since this debt provides me with a tax deduction, I’m not incredibly worried about paying it off early.
A recent review of our tax situation reveals that our total back tax debt is $77,537. The tax debt WAS down to $65,963, but we just had to add another $11,574 to that number for 2007 (after the $25,000 we already paid). These are the numbers that keep me up at night. I send payments every month, and snowflake when I can, however, Mark and I don’t make this our top priority.
I cut costs where I can. I shop with the Grocery Game. I turn out lights whenever I leave a room. I take shorter showers, have a high efficiency washing machine, and line dry our socks. We eat out less, shop less, say “No” to our children more often than we want to. We’re making moves to a more frugal lifestyle, but we never had an extravagant one before. We’re already living on less than 40% of our gross income. There aren’t a lot of corners left for us to cut (that we are willing to cut).
I think the real problem with the tax debt is that it has so many negative emotions attached to it. We get anxious and more than a little angry that we can’t seem to dig out of this hole. The interest and penalties accrue at 6% apr, compounded daily, plus .5% per month. The IRS won’t negotiate payment arrangements because Mark doesn’t have steady income and I don’t make enough to cover our basic expenses. They have put our account on “non collect” status, but it will continue to accrue penalties and interest until our income is more stable.
Today, I’m not interested in getting this debt paid off. Today, I want to stop saying “No” to my family because the IRS has better plans for our income.