It’s tax return season! Everybody is getting those big fat checks if they’ve been waiting for! The “bonus money.”
It’s free money, right? It’s free to spend however you much, right? It’s money that is just given to you one day, right?(Actually, it’s the government returning money that they over-charged you for over the course of the year.) How ever you choose to view this, it’s a lump sum of money that you didn’t have and now you do.
So what will you do with your your tax return?
You can’t walk into any store without seeing huge displays right when you walk in saying to you to spend your tax return on a brand new big screen TV. Or maybe it’s an expensive piece of jewelry or a sound system or a new leather couch. Whatever “it” is, something is being sold to you as THE thing the buy with that chunk of change.
But before you go spending your entire refund on something why not save it instead?
I know, I know. That doesn’t sound like something that would be fun to do. I agree. Saving money isn’t necessarily fun. But you know it’s even less fun? Needing money and not having it.
Do you have your savings account built up yet? Do you have your 3 to 6 months of emergency income saved up? How about your home repair savings account? What happens if your roof starts to leak? Or how about what if your car needs an emergency repair?
Are you going to be out of money if any of these things happens? If the answer is yes, it might be a good idea to use this money from your tax return to start your savings account.
No, it’s not glamorous, or something you can show off to your friends, but won’t you be happy to have money when you really need it?
Maybe you could use the tax return to pay down or pay off some debt.
Once again. I know that this is not glamorous or fun. But if you have any debt hanging over your head where you have to pay for it each month, wouldn’t you be happy or take a chunk out of it with some “free” money?
If you are trying to pay off or pay down any kind of debt, a tax return is a great way to do it. It’s a great way because it will get a chunk of the debt paid off without making you change your budget for the time being. If you’re feeling overwhelmed by a debt snowball, a good way to address it is by paying off a chunk of it.
But what about something fun! I want to do something fun!
Well, don’t we all! You can still manage to take a portion of your tax return and spend it on going out to dinner with your husband. You can even go out to a really nice dinner! Or maybe you are saving up for a special birthday present and you can finally buy it with some of the tax return.
Then by all means! Do something special for your spouse. Plan something the both of you can do together. Absolutely do something that is special for you. You can’t be all work and no play all the time!
No matter what you do with your tax return, as with any large sum of money, make sure that you have a plan. If you don’t have a plan for every penny, you do not control your money, your money controls you. So don’t give in to the urge to buy brand new 85 inch LCD super hi-def TV because it is sitting by the entrance at Target telling you that THIS is what you should spend your tax return on.
Always think through every purchase before you make it. Even if it is “free” money.
How are you going to use your tax return?
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