MPmomof3Think before you spend
April 5th 2010 11:53
:
How to spend your tax refund
Financial windfalls happen so rarely that many of us are tempted to go out without a plan and spend them on the first thing that we think we really want. In reality, however, a decision that is not well thought out can lead us to regret our purchase later. The important thing when receiving a tax refund or any other type of income beyond a normal paycheck is to think before you spend.
First, it is important to come up with priorities. Budget the return wisely to make your money go further. If you can afford it, it is o.k. to spend a portion of the money on something fun or another want item rather than a need item which could make your life easier. It is important, however, not to let the sight of extra money interfere with your normal financial priorities. In reality, there probably are bills to pay, kids to feed and dress, a house that needs repairs, a credit card to pay off, a car payment to make, etc.
When prioritizing and budgeting your return, begin by making a list of everything that you would spend money on if you had one million dollars. Yes, I'm sure there would be a lot of fun stuff in there, but try to include getting out of debt also. O.k., once you have your list done, it is time to prioritize and get back to reality. Odds are your refund was not a million dollars, so pick the most important items from your list and tackle those first. You might even be surprised to find that the freeing feeling of getting that credit card payed off is much more enjoyable than the "fun" vacation you planned with the kids (screaming all the way).
First, it is important to come up with priorities. Budget the return wisely to make your money go further. If you can afford it, it is o.k. to spend a portion of the money on something fun or another want item rather than a need item which could make your life easier. It is important, however, not to let the sight of extra money interfere with your normal financial priorities. In reality, there probably are bills to pay, kids to feed and dress, a house that needs repairs, a credit card to pay off, a car payment to make, etc.
When prioritizing and budgeting your return, begin by making a list of everything that you would spend money on if you had one million dollars. Yes, I'm sure there would be a lot of fun stuff in there, but try to include getting out of debt also. O.k., once you have your list done, it is time to prioritize and get back to reality. Odds are your refund was not a million dollars, so pick the most important items from your list and tackle those first. You might even be surprised to find that the freeing feeling of getting that credit card payed off is much more enjoyable than the "fun" vacation you planned with the kids (screaming all the way).
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