As they say, there are 2 certainties in life: Death and taxes. You can’t escape either but what you can do is put your return to good use. W2s are out and a lot of people file early. My husband and I do as soon as we receive our W2s. Many of us get back between $500 and $5,000 depending on how many children we have. While a nice big chunk of money is awesome to get, putting the money to good use is even more awesome. Debt is crippling and financial stress can ruin relationships and happiness. While I know that each and every one of us would much rather be a happy bird flitting through the trees and flying free, the reality is that we have responsibilities.
Although I don’t agree with how much the government taxes us vs. how little we get back, I can’t do too much to change it except try to vote into office someone who will try to make better use of our country’s money. What I can do, however, is decimate my own personal debts. Run the numbers and decide what is the best way to spend your tax return. Take a look at your opportunity costs and the long term impact when deciding how to put your refund to use. Funding emergency savings or investing in your retirement is a good use of money you weren’t counting on. You can also use it to pay off high interest debts. For a consumer with credit card debt, this is hands down the best option. Credit cards, cars, mortgages, personal loans, these are all (less exciting but nonetheless) brilliant ways to spend that tax refund. Will a new purse or a new TV matter in 5 years? It will not matter as much as the crushing debt that we, as a nation, and a world, continue to dig ourselves into.
But it doesn’t need to be all grey and sad! Put aside a small portion for yourself, to treat yourself as it were. Get a few nice things that you have been wanting and put the rest of that tax return to good use.
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