Did you receive your tax refund in the mail today? Or, was it deposited directly into your account? Waiting for your refund can be torture. But why? Why are you eagerly anticipating this tax refund? Do several stores in the shopping mall have your name written all over them? Do you already know what outfits you plan to purchase and what shoes will match each outfit? Oh, I know…you are waiting to purchase the latest phone or some other electronic gadget, right? Before you indulge in any of these pleasures, stop and think about what is really the best use for your tax refund.
We all work hard and look forward to getting our paycheck every pay period. We cringe when we see all the tax deductions (federal, state and other obligations) taken from our pay. Some of us also cringe during tax time based on the results of our tax returns. We cringe if we owe more taxes and we are elated when we receive a refund. For those that owe more taxes, you did not have enough taxes withheld from your pay throughout the year. For those that are receiving a refund, you either over paid the required tax amount or are receiving a refund of your money based on deductions, allowances or credits on your tax return. The anticipated refund may range from a few thousand to less than a hundred. Whatever the amount may be, why spend it on temporary pleasures or things that give you instant gratification? How long will the feeling last once you have purchased the newest outfits with the matching shoes or the newest gadget? Sometimes the feeling only lasts a few days. Sometimes the feelings start to fade by the end of the day of purchase. Instead of satisfying a temporary itch, take a moment to consider if the refund can satisfy a desire that has more meaning or will give a pleasurable feeling that will last longer than a few days.
Now is the time to remember the things you thought about at the beginning of the year. What financial goals did you set for this year? Did you indicate a desire to pay down/off debt? Did you want to save more money this year? Did you want to take a family vacation? Did you want to save to purchase a house? Did you want to securing your future by starting or increasing your retirement plan? These are great financial goals but what have you done about them thus far? Why not follow through on either of these goals and apply your tax refund to jump start your desires. These goals will give you more meaning and will definitely give you a feeling of satisfaction that will last well past a few days.