Since we’re right in the middle of tax season, I wanted discuss how to maximize your tax refund.
Last year, about 75% of Americans received a tax refund. Were you one of them? Will you receive one this year? If so, it can be a tremendous tool to start your journey toward living your fully funded life!
STEP 1 Before You Spend It, Plan It
I used to have my tax refund spent sixteen different ways by the time it actually arrived. It was assigned to pay for Christmas, vacation, clothes, credit card bills, student loan payments, car payments, a new appliance, a new electronic device, etc.
In addition to having spent the refund sixteen different ways, I had already made all of the purchases via credit cards or other forms of loans.
When the refund actually arrived, it was woefully inadequate to cover all of my crazy spending.
Talk about feeling miserable! Is anyone reading this feeling my pain, or am I the only one who has done this?
When I decided once and for all to take control of my finances, I realized the root cause of my problem.
What was the root cause and the reason for all of my crazy spending?
I did not have a PLAN!
Before you spend your tax refund, plan out the spending! I highly recommend that you use the Mini-Budget Form (Excel) to plan your spending. Enter the amount of the tax refund at the top, and spend it to exactly zero. Remember: INCOME – OUTGO = EXACTLY ZERO.
Start planning now – BUT don’t start spending just yet. We are still in the planning stages.
Next, we’ll cover where the money should go!