Also, with my mother, I've been sending $800 a month lately. I can only send $13K a year without gift tax implications. In talking with my accountant it looks like I may be able to give a little bit of my company too her and repay her more through shareholder earnings in that way. We'll see.

C.) I hope in 24 months to have a small place. Good goal.

I am working on rebuilding my credit score. I have two "rebuilder" type credit cards that I am keeping a small balance (like $15 on each) on and paying each month. I feel good about my business' long term prospects. I've learned a lot and am executing well there.

I'm not suggesting anything fancy – just a small 2bd condo/cottage in a nice neighbohood with excellent schools. This is not a "flip" or "investment property" but your own home that provices you with added advantages of mortgage interest and property tax deductions. My nephew just bought a great little place for $90,000… with taxes and interest, his monthly payment is about $650!

Once again you've made great progress. Now, step back, take a breath, and think about your continued progress and initial steps for assuring your financial future is on a firm foundation.

1. Rebuild your credit score. 2: Start putting money aside into three accounts:

A. Emergency fund: (My guess is your "debt reduction" account has been a psychological safety net for the past few months: You want to continue this, so set aside $$ so cash available during lean business months).

B. Retirement planning: As a business owner you have available a variety of options for putting aside money (SEP, IRA, etc.) that have a variety of tax benefits. Obviously, this is not a liquid asset, but a long-term holding and investing account that you won't touch for 40 years. (And stay away from day trading!)

C. Real Estate Investment Fund: Home/RE prices will continue to drop in 2009. In certain areas property sold through foreclosure is almost 50%. (In southern Oregon, two of every five homes sold were via foreclosure auction.) In 24 months, provided you've paid down debt and saved the $$, you could find a great buy on a small condo or cottage.

Much of these recommendations are based upon common sense while also giving you an incredible psychological boost of having those "monkeys" off your back. In addition, taking care of the debts outlined above will help you to maintain your own sense of control – and reduce the possibility of some creditor or government agency grabbing the funds from your "debt reduction" account – something you experienced before.

Now, with the progress you've been making I want to give you a little "long-term" thinking advice:

How are you doing on rebuilding your credit score? How do you feel about your business' long-term prospects? If you feel you are getting on solid financial footing and feel comfortable with your progress (particularly with your ability to generate revenue to make payment progress as outlined). In my next few posts Ihave some suggestions.

In my last post I made a suggestion regarding your debt reduction – this post outline in further detail the recommendation.

First, eliminate those first with highest interest rates and penalties starting with the IRS…. then pay off the WA state taxes and your car loan. Ultimately, think of the peace of mind you will have knowing the vehicle is yours, completely paid off. Then, make a large payment to your mom prior to April 1, 2009. Encourage her to take the funds and deposit immediately into a ROTH IRA so that she'll think twice (or three or four times) before accessing the funds prior to her retirement.

So, this is my recommendation:
IRS: $29,086
WA State: $ 2,147
WA State: $ 2,400
Auto: $10,518
Mom: $ 6,000

Total: $50,151

With the above payments made, you will have still have over $3,000 remaining from your "debt reduction" fund. More to come in my next post.

I've not been following you for a while… off doing other things. I wanted to check back and see how things are going. First, much prefer your new banner/headline. The website is looking good. Second, it appears your business is doing well given the tough economy. Congrats!

Now, for a little "smart girl" spanking. You need to increase your payments to your mom. I've said it before and I'll say it again – your mom does not have the "catch-up" time to establish her nest egg for retirement. Your spreadsheet shows it clearly – since '07 you've made more progress and paid down more on your student loans than you have your mother. Overall, you've repaid your mom $9500 (or, as your spreadsheet shows a 6.25% reduction) while you've paid Uncle Sam $10,166 (a reduction of over 22% of the originating debt).

More on my suggestions in the next posting.

Smart Girl.