So here I am thinking of many ways to tell people to maxamize there refund check, and it hit me let me first cover what not to do with your extra money. Now I had to do some research and what does the common person do with there money and how much does the average american save. Now there is no black and white anwser, however I have asked a few people, seen many post on my fb timeline, and have a good estimation where this money goes. Lets dig into where you shouldn’t spend that extra cash.
So, funny story I went to a rather diverse school when it came to income amounts. While my friends were not rich I always knew when there mama got there refund check. Either my friend or my friends mom would be rolling in a new vehicle. Now is buying a new car wrong. No, but if you didn’t have a need for new wheels then why are you wasting money on it. Was 2017 so dreadful that getting a new car in 2018 will change things. Okay I drive a 2005 Nissian sentra 188k miles one of my rims is missing I have a massive crack in the window My engine light is on as much as my heat is. Now does it still drive yes, so as for 2018 I will still be pushing my rough looking baby around! I understand that you may crave a new whip or see a great deal on a new car. However saving money should be priority number 1. Wouldn’t it be nice if you could go without a car note? I still drive my car because It allows my family to live on 1 income and sets us up financially better for the future. We could not be a family of 3 living on 1 income with 2 car payments. So keep rolling what you got and move that money to the bank!
I have heard the theory of paying up a few months on rent. Now if you have 0 self control and you could see yourself buying gucci bags rather than paying your rent. Then go ahead but if not and you have better self control (I pray you have self control). Don’t pay up on something that isn’t debt. Paying next months rent does nothing when you already have the money. Now if this was a mortgage then yes, a car note yes. But a lease NO! Try to save the money and in the future if you cant make rent you will have it saved. This is a poor mindset, you are in the state of thinking of today. I have money today so I need to spend what I have. I read lots of articles on how the poor think differently from the rich. Living for today and spending all you have for the moment you receive it, is number 1 mentality of the poor.
Don’t we all need a vaca. I know I am up for one at any moment. However if my goal is to get out of debt or buy a house right now isn’t the time for one. Wait to you achieve your goals before you spend time “celebrating”. Before I had my son me and my husband wanted to travel but we knew I would be on leave for 3 months and not receiving a full check. We ended up staying at the house, thank goodness because I quit my job a week before giving birth.
If you know that you are receiving a tax refund and you have 0 idea on where your going to spend it then you got a problem. No plan usually ends in a disator. Try to look at your finances and see where the money would go best. If its savings or debt. Opt to have at least 1,000 saved before you start paying down debt. This is just a safety net just in case things go bad. I try to tell people to have 3-6 months of living expenses saved. If you don’t have an emergency fund or 3-6 months saved, put your refund to either one of the causes.
After spending time looking into what people actually do I am suprised. However they said it depends on the economy. Just remember your refund check is money you already put in the system unless you have kids or are receiving the Income tax credit. Make a plan and execute! When me and my husband got married we worked ALOT! I had 2 jobs and so did he. Our first year we received a small amount mostly due to the fact he was still in school working fast food. We took the money and threw half in savings the rest went to his student loans. But once we started working full time jobs with higher pay, that next tax season we owed the IRS. This is a testament to how life works sometimes your up and sometimes your down. But if your savings always stays afloat you can maneuver through life no matter the valley! So take that extra check and let it work for you, save it or get out of debt!