How are you feeling this tax season? Are you getting that long-awaited refund or a bill? If it is a refund, do you have a plan for it? Each year, many of us get that "money burning a hole in your pocket" feeling. Let's get that under control before it even starts!
So, you're expecting a return, let's learn how to use it most effectively! Retail companies will often run specials during this time because a lot of customers all of a sudden have an influx of disposable income. Resisting this targeting is tough because it's probably one of the first times you've been shopping since Christmas. You can combat this in a few ways, whether it's simply not going shopping or committing to yourself that you're not going to fall victim again this year. If you plan to go shopping or even go to the grocery store, we suggest making a list and sticking to it.
We mentioned using it effectively, which can be done in many different ways. What are your goals? Are you saving to finish up a house project, focusing on retirement, or saving to take your family on that long overdue vacation. These all sound like great goals, and a tax return could help significantly. We've all done it before, though, you deposit your tax return, and you nickel and dime some of it away on groceries or a few extra online purchases, and this is where the use of a plan comes in handy. We advise when getting your return to have a plan for every penny. It will help you cut down on those unnecessary purchases.
One of the most important things you can do with your tax return isn't flashy or immediately satisfying but can make all the difference someday when you need help. If you're new to our content, we advise always having an emergency fund if you lose your job, become ill, or are hit with a sudden significant expense. If you are fortunate enough to have a tax return, be sure that you have three to six months' worth of savings to help yourself get back on your feet. Hopefully, you will never have to use it, but decisively using your tax return could save you someday.
Receiving a return during tax season can be one of the best feelings, not only because you're receiving a large lump sum of money, but you're getting repaid for paying taxes on your income. It may be a great feeling, but it's crucial that you resist the money burning a hole in your pocket feeling and stick to your plan! For more financial education tips, click here.