Got My Tax Refund, Now What?
- Be Intentional
- Think Bigger
Why you ask? Let’s focus on what a Tax Refund really is. It’s a Refund (return of overpayment) on Taxes (what you owe the government based on your earnings). When you look at it that way it means you paid more to the government than you had to, and ultimately gave them an interest free loan that lasts until your refund comes in the mail.
2) Be Intentional.
First things first, if you got a tax refund then please resist the urge to go right out and spend it all on a big screen TV or something silly like that. There are so many more productive uses for that money.
Next, if you’re an employee at a company, get with your HR person/team and ask to adjust your withholdings (W-4 form) so that this year you’ll actually get to keep more of that money in your pocket throughout the year.
For example, if you got $1,200 back, with an adjusted withholding you’ll be able to keep an “extra” $100 bucks a month in your paycheck to help you pay down debt, build your savings, and/or start contributing to your retirement.
Wouldn’t that bring more peace of mind than getting your tax overpayment back and using it as a down payment on a car you know in your heart you can’t really afford anyway?
3) Think Bigger.
People who get excited about a large tax refund are thinking short term. If you got $3,000 back and started cheering, it might be worth an hour of your time to stop and think what that means. It means that you were willing to give the government money you earned, that wasn’t necessary, over the course of the year.
Now don’t get me wrong, I’m all for the government providing services that we as individual citizens aren’t able to provide (it takes a lot to look after the 325 million of us living in the US).
However, think about having an extra $50, $100 or $250 bucks in your pocket each month so you don’t send the government more than you owe. Doesn’t that sound like giving yourself a raise?
Focus. Be Intentional. Think Bigger.
-Mobile Money Mentor
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