3 Ways NOT to Spend Your Tax Refund!

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If my calculations are correct, you should be receiving that big fat income tax return check in a week or so. That’s if you filed electronically before April 15. Some of you did your taxes as soon as those W-2 Forms were ready way back in February so by now…. your cash may be gone. Between January 31 and February 28, the IRS paid out an average return of $3034.  That sounds like a trip to Turks and Caicos with the girls or at the very least a mall crawl that includes the purchase of some shoes and a purse.

For some of us, it might even mean paying some past due rent.  Sistah Girls around the country have done some interesting things with their recent cash windfall. Here are three of the worst ways to spend that tax refund:

Vacation: Spending your return to take yourself somewhere you may not have been able to afford otherwise could backfire. Once you pay for the plane/hotel package, you need money in your pocket or credit on your credit card to do the things you want to do. Jet Skiing, spa services and yes…swimming with dolphins add up. It’s better to use the refund as the beginning of a savings plan for vacation. That way you don’t have to ball out on a budget.

Furniture and Flat Screen TVs:  New 27-piece furniture set or new 60-inch Smart TV that takes you straight to the Internet?  Don’t use your tax return to take on more debt. Retailers are quick to sign you up for promotions with high interest rates that will catch up to you when you income tax funds are long gone. If you must buy furniture or some other high-end items…buy it out right–no strings attached.

Technology and Gadgets: New tablet? New Phone? New Camera?  No, no and no! These items will depreciate in value in a few weeks/months as newer versions hit the market and you will shove the ones you bought into the junk drawer in your kitchen. Instead, take advantage of all of the Mother’s Day, Father’s Day and graduation specials that will be coming around soon.

And Finally: The truth is, we shouldn’t be getting any refund from Uncle Sam. If he is returning our money it’s like we loaned it to the government for a year–interest free!  According to my instructor at H & R Block…we should break even if our salary deductions are accurate. Stop by your Human Resource office and find out what’s going on with your W-4 form or visit the IRS to use their calculator to make more accurate deductions.

Stay Fly, Stay Fabulous and Rock On!

LA Drye is a workstyle specialist with a passion for all things related to Sistah Girls in the workplace. When not ranting and raving here, she can be found on Twitter @ladrye or on FaceBook at www.facebook.com/washndrye

 

 

One thought on “3 Ways NOT to Spend Your Tax Refund!

  1. Took me a long time and a different tax bracket to learn this helpful tidbit. As exciting as it was to “get something back” in my youthful, naive days, something just didn’t sit right. I had visions of Uncle Sam knocking at the door one day looking for re-payment of those refund checks! Nothing a smart hire of an accountant didn’t fix! I sure rest easy these days.

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