Are you getting a refund this tax season and can't wait to spend it? Well, wait a minute. What happened to last year's refund? Can you honestly say you have no regrets for what you did with it all, or at least a significant portion of it?
If you have no regrets, you are confident it was money well spent, and you were in a better financial form than before the refund, congratulations! The more reason you should do even better this year.
Or do you look back and wish you had not been in too much of a hurry to spend? Do you wish you had "remembered" your more pressing needs before you blew all your refunds?
Well, the key is in planning. Plan even before you get your refund. Set an order of priority. Put your plan on paper, and discipline yourself to follow through on it.
Often when we get our refunds, we see it as "free money." But is this what it really is? A lot of people find it hard to save extra to meet the various needs that come across their path all year long, so this should be seen as your savings during the year. Remember, these are payments you made out of your paycheck in the year! It is not "free money." It is your hard-earned dollar. So make the best use of it.
What are your most dire needs? And before you spend, ask yourself, "Do I need this or is this just a spur of the moment desire?"
Do you have debts that keep you up at night with huge interest rates eating deep into your finances every month? Do you have major repairs you have not been able to afford without hurting your monthly budget?
Below are some suggestions on what we can do with our refunds, in no particular order. Arrange them according to your priorities and your peculiar circumstances:
You don't have any debts that need paid down, or any "needs" whatsoever? Then you can also do the following:
Still undecided? Then leave the money in your account. Do nothing with it until the excitement of having extra cash wears down. Then you may be able to analyze your financial status and needs better and draw up a plan. Just don't rush to spend it all, so you are not sorry afterwards.
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