Guess what I did this morning? Hint – it’s about finances 😉 I was checking the IRS’ website to see when to expect our tax refund. Good times! It looks like we should be receiving it soon. (By the way if you e-filed your tax return, please keep in mind your refund should be sent to you within 14 – 21 days.)
In years past, we’ve used the money to pay down our mortgage, beefed up family savings, and contributed to the car fund. All in all, we’ve been happy with our decisions. Now, though, we have a situation where we have no pressing expenses coming up that we need to cover and our debts are both low interest. So my husband and I are discussing what to do this year with our tax refund.
Tax Refunds – Oh The Possibilities….
Besides paying down the student loan and shaving off even more time on it, there are a few other options that we are thinking about. Before we sit down tonight and weigh the pros and cons of certain choices, I want to list out the possibilities.
Pay down the student loan. This is one of our major goals for the year. While we won’t see any immediate change in our monthly cash flow, getting rid of this debt would help us move closer towards our long term goal of becoming financially independent.
Pump off the savings account. You may wonder why we would want to put more money into savings – after all we have a buffer already set up. The main reason we’d like to have some extra cash in the account is that we are thinking about selling the townhouse. Our development is finishing up and the only other spot in our area that has new homes building has a selling price that starts about $50k higher than our neighborhood. Depending on how things look, we may try to sell our place and get a house closer to my husband’s job. If we do go down that route we’d need some cash to cover the sale. On the other, this is a potential situation and the money could be used for other goals.
Invest it. We could take all or part of that money and just contribute it into one or both IRAs. It would be an easy way to bump up retirement savings.
Buying an entertainment center. Picking up an entertainment center has been on our minds for quite a bit. We’ve put it off since it isn’t a need and we had other goals we felt were bigger priorities. Now that out little girl is a curious toddler and getting into everything, there is an element of practicality in acquiring an entertainment center that has not only more storage, but don’t we can lock. She has a great habit of getting into our stuff and our current TV stand has done nothing to slow her down.
Writing this list out actually has helped me to lean towards putting most of the money into paying down that pesky student loan and then getting an entertainment center. However, I’m just one half of the couple, so we must see what HE thinks too 😉 I have a feeling it will be something similar to what I’ve mentioned, but my husband may have another plan in mind.
Thoughts on Using Tax Refunds
I’d love to get your feedback and your stories. Have you received a tax refund this year? How have you two used it? What was the best way you’ve spent this year’s or a previous year’s refund?
Last fall I wrote how couples, even when times are well for them at present, should have a job loss emergency plan handy should the unfortunate event happen to them. Today I want to add another scenario for couples to consider when sitting down and talking about their finances regarding a job loss- severance packages.
The right severance package can soften the blow of a job loss. However it means that you have to get laid off from your job and understandably, that can be stressful.
Companies, when squeezed financially (whether by shift in sales or their own doing), have usually used lay offs to to cut costs. As part of an employee’s termination, companies may or may not offer a severance package. According to the Department of Labor:
Severance pay is often granted to employees upon termination of employment. It is usually based on length of employment for which an employee is eligible upon termination. There is no requirement in the Fair Labor Standards Act (FLSA) for severance pay. Severance pay is a matter of agreement between an employer and an employee (or the employee’s representative).
That doesn’t mean that workers have no way to prepare. Now some states, like New York, have laws like the Worker Adjustment and Retraining Notification (WARN) Act that require employees to give notice. (If you have information regarding applicable Canadian laws, please email and I’ll link to it to help Canadian readers handle this scenario.)
Why Getting Laid Off from Work Might Not Be a Bad Thing
After putting in so much time and effort into your job, being laid off can be an emotionally draining experiences. Add to that the financial implications and you can see how some will do everything in their power to not get laid off.
However there may be a couples of reasons that getting laid off can be a good fit for employees – provided that they get some financial cushion.
You’re burnt out from working at job so long and you want to switch careers.
You’ve been working a side job, hoping to turn it into a full-time gig, but you don’t have enough time to devote to it.
Your company’s finances are a bit shaky- perhaps they’ve cut hours for employee or have already started downsizing.
What if there is a way to leave while getting some money out of it? Would you feel more comfortable about the transition? If any of these scenarios fit you, you may want checkout’s Sam guide on engineering your lay-off.
Who Could Use Tips on Engineering Their Layoff?
I will be the first to say that this book not for everyone. Sam gets into details and scripts on what you need to do months and weeks leading up to the severance package. This book is for someone ready to make a life change and they want a financial cushion handy.
Please don’t think that this a guide about easy money. It’s for those looking at putting in some work now to get the results they want.
You need to know which players to work with in your company so you can maximize your lay off. You don’t want to burn bridges. To make it successful, you have to be willing to work Human Resources – getting a severance package is a bit of an art and Sam shows you how.
I’d love to hear from you. How many of you had to deal with a job loss? were you able to get a severance package that allowed you to transition to your next career? How did the two of you work it out? How long did it take for you to find a comparable job?
Disclosure: This post does contain affiliate links.