It’s tax season, with all its ups and downs. The downs being the headache of doing your taxes – and the ups of, hopefully, getting a hearty refund.
If you’re like many Americans, your tax refund is a sudden inflow of a substantial amount of money. In theory, this sounds great. But in reality, 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 lose.
- You haven’t had a nice date night 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 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 coalescence of life. The goal is to move forward while financially honoring all of your needs, wants, responsibilities, obligations.
To prioritize, consider how your life will be changed via how you use that money:
- How do you think you’ll feel in those boots? Amazing? Or would the charm wear off quickly?
- Does your gut say your marriage would benefit from a date night?
- Still, that credit card debt is nagging. 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 to provide a good education. 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.
Relationships need to be tended, making date night a good idea. But that doesn't mean you need to patron the most expensive restaurant in town. Find something that makes your relationship feel special and gives time and space for you to connect.
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 your entire refund here is likely to feel anticlimactic and leave you wanting more.
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, plus the value of education is priceless.
My rule of thumb:
- 1/3 to the past (credit card debt)
- 1/3 to the present (date night and boots)
- 1/3 to the future (funding college education)
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. You could try a vintage store where you might find the same quality for a fraction of the price.
Tune into yourself. You know what it feels like when you do the right thing. Do what it takes to create that. You will feel it when you find your balance.