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A friend of mine is getting a massive tax refund – almost $10,000. I’m frustrated that my friend lets the government keep his money interest-free for a year. But he likes the big cash influx, which he is more likely to save than if he had received a slightly bigger paycheck every two weeks during the year. Here is what he said when I asked him about his return.
“What are you going to do with it?”
“Put it in the bank.”
“All of it?”
“Yes. Why not?
“Isn’t there anything you want to spend it on?”
“Not really.”
I guess he didn’t get the memo that Americans are big consumers. Not that I want him to spend it all. I’m just surprised that he is not going to spend a fraction of it on himself.
[poll id=”60″]
If you are getting a refund, here are five things to do with it:
- Pay off high-interest credit card debt.
- Pay off any other high-interest debt you may have.
- Boost your emergency savings account.
- Contribute to your IRA, Roth IRA, or other retirement fun.
- If you’re in a good place on the above four, spend a little on yourself!
If you haven’t filed, here are three places you can file your taxes online for free. Remember to review the new tax credits available and use all the tax coupon codes available. If you are looking for paid help, here are tips to hire a tax professional.
Welcome to Bargain Babe! I’m Mara, and I’m so glad you’re here. I am an obsessive bargain hunter and penny pincher, and I am determined to live a full life without EVER paying full price.
I’m still trying to figure out how to balance my fed and state taxes with my withholding amounts, and have owed more than was withheld in the past. This year, I got more from the fed, which covers what I owe the state. The rest will probably go into my emergency savings, particularly considering the current state of our economy. Since I don’t have any major debts, I’m one of the lucky ones, especially since I’m retired.
I got $6.0 back and am putting $2.2 aside for my qtly property taxes (due 5.1.2010) and using the rest to pay down bills.
I will use part of my return to get my car fixed,I have been waiting to pay cash for the repairs(estimated to be over $1,000) and then the rest will go into the bank for an emergency fund. I was injured earlier this year and learned how quickly savings can run out!
Whatever I get back from the IRS this year will go towards back taxes they calculated I owe them from 2008. I’m not sure what I will get from the State, but I would love to pay off two small bills and then put the rest in a emergency fund. I’m struggling like everyone else and it’s embarrasing and totally mind boggling to think I have gotten into this mess. Long story short, whatever I get from the State, I will try and save some.
I would be embarassed to say I am getting a refund.
There’s no need to be embarrassed about getting a refund… especially if you’ve been stung by the state to the tune of $700+!!! I do think it’s good to try to figure out just how much to have withheld for both fed and state, so that everything pretty much balances out. However, that’s not always possible, especially when we’re all dealing with various changes to the tax codes. Sometimes wisdom does come with age! :O)
The math really depends on what he would have done with an extra $10,000 in income over a year. Bank rates are so low just now that it would probably have paid less than $10 in a checking account or CD.
Good point Tinsel!
I find it interesting that companies can get all kind of incentives to do business in NC under the premise that jobs will follow. Increase in jobs means an increase in income tax revenue yet our taxes go up. Government is quick to throw the millions statistic when they are down but never seem to site anything when they are/were up. It appears that everyone but the citizens reap the benefits. Is it fuzzy CMS math?