3 Ways to be Intentional with Your Tax Refund

Photo Credit:  Compassion International (Creative Commons)

Photo Credit: Compassion International (Creative Commons)

 

What’s the best way to spend your tax refund?

Isn’t that the $68.00 question?  The first time I got a tax refund, it was $600.  I had no clue what it was.  So naturally, I got a goofy grin on my face, waved it around to no one in particular and spent it.

 

I don’t profess to have the best technique for spending your refund money.  But when I look back on my first tax refund, I have no clue what I spent it on.  Nor the one after that.  It was my “zero plan” method.

If you want to be more intentional with your refund, try this 3 step formula:

  1. Save: I challenge you to put away at least HALF of your refund.  Can you save more?  
    • Do you have $1000 set aside for emergencies?  If not, do that.  I cannot tell you how many times my Financial Peace University students say how great it feels to have $1000 in savings (often for the first time).  It’s a powerful safety net.
    • Already have $1000 saved?  Time to slice some debts.  Here are some strategies we used to pay off debt in 2012.
    • For a full list of other saving options, read Dave Ramsey’s 7 baby steps here.
  2. Give:  Review the last 30 days.  Who came into your life with a need?
  3. Spend:  Plan ahead together and agree on set amounts for each of you.  
    • Date night?  Yes, if you’re debating.  Date your spouse (just don’t live at the movie theater, like we used to).
    • Family fun night?  I’d love for us to go to the local trampoline park, but the baby never seems enthusiastic when I bring it up with him.
    • Hobby?  Mini shopping spree?  Jamberry?  This is where you have that freedom.  It’s planned and budgeted.

 

Turns out we gave a little more than usual in 2014.  And we had a kid.  The government seems to give you a higher refund when you donate and procreate*.

Go Team Harris.

*Don’t get pregnant for the annual tax break.  You’ll end up on Dr. Phil.

All that to say, we just walked through this 3-step process.  Life’s not all about penny pinching.  Go have some fun.

I speak from experience when I say that doing all 3 of these steps together truly is FUN.

 

ACTION STEP:  File your taxes.  If your tax refund is already spent, apply these 3 steps to your next paycheck.

 

Join the discussion:  What’s one thing you did or will do with your tax refund this year?

Wife, mother of two, Christian, financial coach, writer, snowman builder, aspiring yet mediocre cook, diy project tester, goof.

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