Love More. Live Better. A Southern Couple's Guide to Successful Living

I was in the locker room at the gym the other day and overheard a conversation that disappointed me.  It was a discussion about tax refunds, and the 2 women were discussing how desperately they needed their tax refunds to pay off this and that.  I felt for them.  I mean, I know that they can’t be that desperate if they are still paying for a discretionary expense like a gym membership, but to know that people rely on their tax refunds for regular expenses is terrible.

In general, it’s not a good idea to even have a a tax refund.  It’s better for your bottom line as well as mathematically to get that money in your paycheck throughout the year, instead of giving the government an interest free loan for a whole year, but I understand that some people just like to get that lump sum at the end of the year.  That’s fine.  However, if you choose to get the lump sum refund for your taxes from the government, you shouldn’t be counting on it for regular bills or expenses.  This money should be used to pay down debt, start (or add to) an emergency fund or invest for your retirement.  These choices will help better your life and your future, whereas buying a big screen TV will only give you short term entertainment.  Do yourself a favor and don’t budget your tax refund into your budget!

Also, I wanted to share a friendly reminder.  Tomorrow is the first day of April, which means that summer is only a couple of months away.  Have you started planning your vacation yet?? More specifically, have you started planning how you’re going to pay for your vacation?  If not, now is the time to start!  Review your budget and see if there is money left over (assuming you have no debt other than your house and are already saving for retirement) for a vacation, and if there is, you should start saving for it now!  Nobody likes to be caught off guard, and that is usually what happens at Christmas time and vacation time.  People are always surprised that vacation time and Christmas came as quickly as it did, and so they aren’t prepared.  This reminder is an effort to be sure that doesn’t happen to our readers!

Tags: budget, Financial planning, saving money, tax refunds, vacation

This entry was posted on Tuesday, March 30th, 2010 at 10:12 pm and is filed under Wild Card Wednesday. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.