|SKIP THE REFUND AND PAY YOURSELF FIRST|
|Posted on: Mar. 04, 2017 in Debt|
Many people look forward to tax season all year because they know that they’ll be getting a refund. That annual cash windfall is often viewed as a bonus that can be used to pay off some debt, bolster savings, or even allow for a little shopping spree. While it’s certainly nice to suddenly get a fat check in the mail, over-withholding on taxes isn’t in your best interest.
When you have taxes taken from your paycheck, you’re giving that money straight to the government. It sits there until tax time rolls around and then you get some of it back. While it was gone, it wasn’t working for you to either lower your debt, ease your financial burdens, or earn interest. Now, who do you know that would be willing to give you money or resources with nothing in return? That’s right, no one.
If you receive a large tax refund every year, consider speaking with a tax professional who can advise you how to change your withholdings so more money is in your paycheck. From there, determine how your bump in take home pay can be best utilized.
Getting money is always nice. But stop giving the government an interest-free loan. Instead, set yourself up for financial success by getting out of debt, building your savings, or padding your monthly budget.
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