Every year we all get advice on how to deal with tax returns. Figuring it all out can get a bit crazy. Even worse is when we receive the refund and realize it’s all gone before we had it. Here is how to be smarter.
Tax time: That interestingly peculiar time of year when ordinarily smart people begin to make really dumb financial decisions. Isn’t it amazing to watch what a little extra cash, okay well for some, maybe a lot of extra cash lining the pockets can do? The average tax refund for 2011 may be a little over $3000, but there has to be several thousand dumb things people are doing with the money at any given moment. I know your pockets are sizzling even as you read, so I’ll be brief and just give you 5 dumb things smart people do with tax refunds.
#1 – Act like its FREE money. The operative word in the term “tax refund” is REFUND! Common synonyms for refund are “repayment,” “reimbursement,” and just plain simply, “money back!” This means that tax refunds are not free money! The government is not giving you a bonus every year just to thank you for being an American. This is money that you’ve allowed them to “borrow” from you all year long. And now, unlike most of your friends or family members, they are actually paying you back. Never mind the fact that they are paying you back with NO interest even though you pay them back with interest on your student loans. . . . I mean, who’s keeping tabs, right?
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