Trimming the Tax Bill but Hit By a Tuition Speed Bump
The Colón Family
Age: George, 53. Kim, 43.
Background: The Colóns celebrated their one-year anniversary in August. They live in Dumfries with Kim's college-age daughter. Kim is an Air Force senior master sergeant. Next month, she'll celebrate 20 years of service. George retired from the Army after serving 22 years. He now works as a contract manager in the District. They have a combined annual income of about $191,000.
Goal: Pay off tax and consumer debt, increase savings and stop living paycheck to paycheck. They also want to contribute more to their retirement funds.
Progress: In June, the Colóns paid off part of their past-due tax debt and five credit cards, for a total debt pay-down of about $8,800. I had them pay the smallest debts first so they'd gain momentum, and it worked.
When the challenge began in February, the Colóns had more than $30,000 of debt on eight credit accounts. Now they have $1,000 left to pay off.
"We did what you told us to do," George said.
There is still the matter of Kim's $40,000 in student loan debt. She borrowed the money to study for a doctorate in organizational leadership. The loans are currently deferred.
In the last installment of the challenge, the Colóns were in negotiations to reduce about $12,000 in outstanding state and federal income tax debt. They won their challenge, and their federal debt was knocked down by $9,000.
New developments: Kim was deployed to the Middle East in August and is to return home in February. With Kim away, the burden of handling the financial books is left up to George.
At first, George said he struggled as the family treasurer.