This morning, I heard the UPS man drop a package on my door step. I hadn’t ordered anything but hurried to the door. Who doesn’t love mail so excitement was at an all-time high. I mean, who doesn’t like to receive a letter or package unannounced and indeed, the package was for me so I ripped into that wrapping
How exciting it was too! I ripped into it and found a cute picture frame that said Me and My Uncle. It was from “Brother” (DanielBoy’s older sibling.) His name is David but everyone calls him “Brother”, even his parents. I texted him immediately thanking him for such a thoughtful gift. He replied with “Since it’s tax return season and I don’t have kids yet, I buy my nephews and family stuff. ‘Love y’all!”
What a sweet thing to do! We need to all be more thoughtful like this. Family is important and this is a super-sweet way to show it. Since it’s tax season and Brother was sharing some love, I thought I would share a few tips of my own.
This year is still fresh and what a great feeling when that tax refund hits your account. It has been said that the average refund check is $3,000, which is a good chunk of change. Have you considered investing this money, purchasing something or taking a relaxing vacation? These are all things each of us might think about while waiting on the cash to hit the bank account. I have learned very quickly that a tax refund check spends quickly. Here are a few tips that have helped me in the past few years.
1. Write down things you would like to do with your income tax money.
Everyone has things they want to do with that “extra” cash. The key is to set yourself up for a successful year ahead. Yes, we all want new things but what about investing to make more or getting out of debt to save by not paying all that interest?
2. Do not spend a cent until the check has arrived in your account. That’s a “duh” but you wouldn’t believe the people who do!
Do not get out and charge something expecting to pay it off once you receive that check. Do not promise to pay someone on the day of the return. Things do happen and for one reason or another your check could be delayed or the refund amount was not what your expected. Be patient and wait.
3. Place a budget/money plan down on paper
Writing something down for you to review later is always a good idea. It helps a lot of us stay organized. This will also keep you on track and help you build a budget.
4. Commit to paying off at least one debt.
Pick a debt to pay off completely. If you do not have enough money to pay it off try to call and negotiate a pay in full amount. You might want to try a debt that has the highest interest rate.
5. Save 20% of the refund and place in a hard-to-reach savings account (one without local bank access, for example.)
Saving any of a large “wind fall” like a tax refund is hard wise to do it. We all want to retire someday and will need the funds in the future. You might want to place this money in a IRA or talk to your financial advisor on a good option suited for your needs.
6. If you must, spend 5% on something for yourself.
Technically, spending more than 1% on yourself is splurging but if you are like me just go with 5%. You’ll feel better!
Just be wise, whatever you do. In the end, it’s your tax refund for goodness sake! In past year I would have hit the mall but this year, I’m taking Precious-One shopping.
7. Invest to receive an income later
Try investing a percentage of your money into something that will return the money and some later. I am going to use a small bit of my tax refund to attend a blog conference in NYC this July. This will broaden my knowledge. I am in hope my money will be refunded with my website income. Try to find something you can invest in that will help you earn income later.
These things can be hard to do but you have to look at it as a future investment for yourself.
Katie Girl