Around the Corner ©: The Tax Refund Lotto
So you have filed your federal income taxes, or are preparing to do so by the deadline (April 15th), which is - around the corner. Think about what you plan to do with your refund. Think about how that sum of money plays into your overall Spending Plan. It’s not free money. It’s not a lottery you won, so don’t blow it like you might – you know the saying “easy come, easy go,” because you worked hard for your money. Think of this pot of money as being able to:
Reduce your debt load. Pay off something completely, or add the refund amount as a one time or annual boost to your “snowball” pay-down.
Source your emergency fund. Trying to visualize a fully funded emergency fund can be difficult, but if you sweep amounts like your tax refund into the pot, the “fully funded” button pops up that much faster.
Completely fund a top priority item on your Financial Goals list. And you do have a prioritized Financial Goals list, right?
It doesn’t matter whether your refund is $100 or $5000, put it to work for you financially. Don’t think that $100 is too small to do anything meaningful. A bucket is filled one drop at a time.
So, while I am not against having fun, if you are going to return from that trip and feel the pain of your finances, take care of those first and then party after. Mom was right about homework first and fun after – because guess what, who wants to stop the fun to do something that even though it is more gratifying in the long term, can feel way less appealing? So “Fund Up” © first, and then party.
Of course if you are one of those “stupid rich” people off to “see sport” as seen in that advertisement, you probably aren’t reading this.
Help motivate others by commenting below on how you put your tax refund to good use to advance your Financial Goals.
Coming Up: A post on whether its a good policy to even be getting a tax refund.
Note: The above is for information purposes only. Everyone's financial scenario is specific to them, so check with your tax advisor to determine how the information stated above applies to you.
"No matter who you are, making informed decisions about what you do with your money, will help build a more stable financial future for you and your family." Alan Greenspan