That's what the average person will be receiving from the IRS in the form of a tax refund. Popular to contrary belief, a tax return isn't a bonus nor is it "free money". For some, who don't pay taxes, it may be viewed that way. But for most, this is money that you worked hard for and overpaid to the government.
Rob's Philosophy on Returns
I think tax returns are a positive thing, if done in small doses. $3,120 is a little too much to be getting back. If you took $2,400 of that and spread it out throughout the year, you would have an extra $200 per month. Sometimes though, it is hard to have a good understanding of what you will get back, this is where you need to play with a W4 calculator to see what works for you.
Turbo Tax has a nice W4 calculator (for free) that you can use here.
Back to the philosophizing...I'd rather get money back than pay it in, but what I care more about is what you do with the money. It doesn't matter if you get $5,000 back or $1,000 back, if you don't have a financial program that can help guide you as to where you ought to put the money, it will surely get wasted. This is your hard-earned dollars. Don't waste the money on crap.
9 Moves and Tax Returns: A match made in, well, Rob's Living Room, as that's where I wrote most of the program...
Let's run through some examples on where your $3,120 tax return would go in the 9 Moves program (which is free, by the way, no sign up, ads, or any of that crap). If you were in Move #3 (Save 5%) you would dedicate the $3,120 to your first savings goal of 5% of your net annual income. If you made $5ok, net, your savings goal would be $2,500. BOOM, funded.
And you still have $620 to throw at debt (which is Move #4).
See guys and gals, this is value of having a system. This is where you can walk right through the plan with a purpose and know where you're at all times.
Waste, Wants, and Entitlement
The not-so-cool W.W.E. People waste a bucket of money on unnecessary things when they are in tremendous debt. "I have a 46-inch flat screen but I could really use a 55-inch." Instead of socking that $500 towards debt, you put it in something that depreciates in value super fast. Moreover, people want things they can't afford. They spend money on iPhones and then can't afford the "lease payment". Lastly, and this one may be hard to hear, people are entitled. They think the market or the world owes them something, when really no one owes them anything.
The only person who owes you something is yourself.
Tax season may be a great time for you to jump start your finances. Look at the 9 Moves program or even another wellness plan that works for you. I recommend looking over Move #1, it's a great place to start. As always, you can reach out to me for help either on our contact form or just hit me up directly on my personal email: firstname.lastname@example.org