Filing my income taxes this year was both easier and harder than last. Easier because I only had to receive a T4 from a single employer instead of multiple, harder because I had to claim all my blogging/writing as self-employment income. Based on my tax refund estimator I actually had to pay taxes this year for the first time ever, which meant that while I got a large tax return, I definitely didn’t get back everything I paid in! The trials of being a contributing citizen.. Oh well. Nevertheless, I did benefit financially this tax season and I’m happy to report that I put it to good use. When my income tax refund was deposited into my bank account, the first thing I did was make a $3,100 student loan payment.
This means my new balance owing is below $5,000 — which is less than 1 month’s gross income for me.
Craziness. The $4,941 remaining doesn’t even feel like that much owing — and why would it? That total used to be over $20,000. With over $16,000 already paid off, the remainder of my student debt almost looks like petty change.
Well, not really, but it’s certainly easier to swallow.
If you’re interested in following my student loan payoff progress, you can always check out my charts HERE.
I’m a BIG advocate of using your income tax refunds to pay down your student debt. Because I paid for my university education, I racked up tons of tuition credits that gave me significant tax breaks in 2011 and 2012. This is the reason why my income tax refund was so big. It only makes sense to use your large income tax refund that you received solely because you went to university, to pay down the student loans you borrowed to attend university.
Essentially you paid the government money (because most universities are government-funded institutions in Canada, so paying tuition is paying the government), then they pay it back to you in your income tax refund, and then you pay the government again by paying down your student loan.
Ok, so the government wins monetarily but you’ve got this great educated mind now. Huzzah!
So next year I probably won’t get an income tax refund, but I won’t have any student loan debt either. My plan to tackle the remaining $5K I owe is simple: just pay it off.
February and March are spendy months for me this year because of booking various work and personal trips. Once the dust settles for flights, hotels and rental cars, all my money can be funnelled towards the student loan. I’m not a huge fan of deprivation in the name anything, but debt-freedom is a worthy cause and at this point, I wouldn’t have to suffer for long. Besides, if I ever get really annoyed, I can always do a gigantamous transfer of funds from savings and wipe out my remaining debt.
I’m always a sprinter at the finish-line, even if I strolled and lolly-gagged the rest of the race up until that point!
In any case, I’m almost done, guys! I’M ALMOST DONE.