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What To Do with Your Tax Refund?
March 2, 2015
So, it’s tax season, with all its ups and downs. The downs being the headache of actually getting your taxes done – and the ups of, hopefully, getting a hearty refund. If you’re like the vast majority of Americans, your tax refund is a sudden inflow of a substantial amount of money, which, in theory, sounds great. But really, many folks have nerve racking indecisiveness when it comes to this apparent “bonus” money.
You’ve been feeling tight in so many ways; and you long to let those constraints loose. You haven’t had a nice date night out in forever! Plus, you do need some new boots. Maybe, since you can, you should go for those expensive ones that have been living in your dreams.
On the other hand, putting that money into your 8-year-old’s college fund would go a long way in 10 years.
Also, there is some credit card debt that’s racked up – maybe it’s best to use your refund to just eliminate that?
These are the types of decisions that people face when their refund comes in – including me. I feel you.
Yet, I’m an expert here. May I offer something?
Being pulled in different directions is part of the convalescence of life. The goal is to move forward while financially honoring all of your needs, wants, responsibilities, obligations.
First, consider how your life will be changed via how you use that money.
How do you think you’ll feel in those boots? Amazing? Does your gut say marriage would benefit from a date night? Still, that credit card debt is just nagging over your shoulder. It would feel great to be rid of it! But, your child is the most important thing in your life! It’s a top priority t to provide the best education possible! Still, that’s 10 years away. We can’t guarantee we’ll even be here then. And those boots are amazing today!
The trick is to find a way to honorably tend to them all. Just not all of them all.
Credit card debt isn’t doing you any favors. Drumming it down will financially benefit you in the long run. But credit cards live in the past, and spending all your entire refund here is likely to feel anticlimactic.
If those boots are truly going to add significant value to your life experience – DO IT!! You’re worth the self-care. But when they offer that second pair at ½ price, think hard before buying. Half price is still real money that may be better used somewhere else.
And the financial responsibilities of parenthood are real.
My rule of thumb: 1/3 to the past, 1/3 to the present, 1/3 to the future.
But it’s YOUR $. Find YOUR BALANCE.
Maybe the boots look great – but when you listen to your heart, you’d feel better with that money in your child’s education fund.
Tune into yourself. You know what it feels like to have done the right thing. Do what it takes to get that feeling. You will feel it when you find your balance.