Do this BEFORE you spend your tax refund

Budgeting

Mar 30

It's probably not what you think.

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*Photo credit:* *Markus Winkler* *on Unsplash*

The due date for taxes in the US is just around the corner!

I don’t know about you, but I’ve been seeing the ads for almost a month now:

Tax Refund Savings!
Tax Refund Sales Event!
Rev up your Tax Refund - All inventory on sale!
Getting a Tax Refund? We have great deals for you!
Tax Time Savings!
Everything in store is 50% off!
Massive Tax Time Sale!

Guess what?

You don’t actually have to spend your tax return.

*GASP!*

I know, unpopular opinion among retailers, but it’s true. In fact, if you get a tax refund, it’s actually not just ‘extra money’ but rather money that you earned and loaned to the government, interest free.

So before you rush out to treat yourself or take advantage of a ‘once a year sale’, I’d encourage you to take a few minutes to think about what would be the best use of that money.

Add to your emergency fund?
Pay down some debt?
Simply use it to get ahead on some expenses?
All of the above? (You don’t have to pick just one thing!)

And if you still want to spend some of it, that’s ok too. But at least you took the time to stop, think about it and make an informed decision.

Do you normally get a return? If so, what are you planning to do with your return?

PS - if you generally do get money back each year, you might consider looking at your withholdings (what’s kept back from every paycheck). Maybe it would be better to have that money in your bank account each month, rather than just once a year. Just be sure to check with your accountant or financial planner to figure out what makes the most sense for your situation!