Well, it’s that time of year again. For the next few months it is tax time! That means some people will be having to pay some taxes, but most people will be getting a return from the IRS, some being quite hefty.
So what do you do with all that millions, er….money?
SAVE IT! Ok, not really.
I mean, SPEND IT! Ok, not really that either.
How about we do the best of both worlds? Save half and then spend half on a need. A legitimate need.
So when you get that big tax return in the mail or electronically deposited in your account, take a calculator and divide it exactly in half. Then take that number that is now half of your tax return and put it in a savings account. Some people don’t have much of an emergency fund or anything at all in savings. This is a perfect way to pad that.
Now with the other have, spend it on an actual need. What do I mean by need? Simple. It could be that a house repair, car repair, maybe you legitimately need some new clothes because yours are falling apart. Another great need is paying off a credit card or putting it toward a student loan. The point is to not go out and buy a new TV or video game system or clothes you don’t need to just because yours are “out of style.”
If you’re looking good on debt and don’t really need anything you could use that other half to specifically save for something you may need or want in the future. One example is a family vacation. Vacations can be expensive, but to me that is an investment based off the time and memories you are creating with your family. If you are ahead on things financially then why not put that money aside for something that is going to be worthwhile rather than something that really won’t bring value into your life?
What are some ideas you have for using your tax return money?
Sound off in the comments! 🙂