Putting Your Tax Refund To Its BEST Use

"Frugality includes all the other virtues." -Cicerone

Are Christmas bonuses and tax refunds one and the same?

Not quite.

I've recently written about this dynamic. After all ... that is YOUR money that you're "getting back".

Imagine this: you go to a shop and buy something for $5. You hand the cashier a $10 bill. The cashier hands you back a $5 bill as change. Did you just get more money? Of course not, you paid more than the bill, so you got YOUR money back.

Unfortunately, many taxpayer reactions to a refund check resemble a kid on Christmas morning. And ... I get it. All year long, tax withholdings got you to this point: a chance to redeem a sum of cash, maybe pay off some debt and maybe splurge on that new toy you've been eyeing.

But what if you started viewing your refund a little differently? What if you started putting it to long-term use instead of short-term gain?

Remember: this was your money, to begin with.

A Rainy Day Fund

NerdWallet® reported that less than 45% of Americans would be able to cover a $1,000 emergency expense without having to turn to a credit card or a loan. And it begs the question: could you?

Even if it's not $1.000, life has a way -- through our cars, our homes, our technology -- of springing large, unforeseen expenses our way. They hit us like a ton of bricks, and we get frustrated ... until we understand "that's life". I want you as prepared for "life" as you can be, and part of that means taking part of your refund and putting it toward a savings fund.

Via Credit Union

As opposed to regular banks, credit unions operate as not-for-profits. And if you're a fan of investing in smaller businesses, saving part of your refund aside in a credit union could be a smart strategy.

We'll chat about credit union advantages/disadvantages another day, but in short, they often offer cheaper terms and conditions -- if any at all.

Setting aside money in a credit union, or bank, will take away the temptation of spending. Out of sight, out of mind, right? Just make sure it stays out of sight until you really need it.

Go for Goals
A few weeks ago, we talked about delayed gratification when it comes to spending.

Tax refunds are the epitome of testing that virtue.

Without a doubt, receiving an "unexpected" sum of money is exciting. You typically think of the weekend vacation you can now afford or the extravagant new restaurant you and your spouse have been wanting to try out.

Pump the brakes. Know that financial success is rarely found overnight, and never achieved through a tax refund alone. But it can provide a good first step in saving for a home, retirement, or a college fund for your children.

I would love to chat more in the next few weeks, about your tax season planning, and how you can take all facets into account for your benefit.

Watch this weekly blog for guidance moving from tax season, to saving, to success.

Right NOW, do an internet search for “Credit Union near me”. Put the plan in place: Start the account that will hold your tax refund, when it arrives.

BE THE ROAR not the echo®

Warmly, Janet