How to Create a Plan for Your Tax Refund
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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
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.
Bump Up Our Savings
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.
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 our 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 we can also 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?
We’re getting back around $3,500 and it’s all going towards student loans! 🙂
Wow, $3,500 going towards the student loan? Great job on having a plan to knock down your debt.
I love thinking through these kinds of scenarios. It’s easier to make the practical unsexy choice when you really consider it before the money is in your hands.
We’re not expecting a refund – in fact we probably owe a little this year.