Hey there love!
I hope your 2018 is off to a wonderful start!?
Are you crushing those New Year Resolutions?
Blah. Neither am I.
As my 3-year-old daughter says, “It be okay” 🙂
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Soooo… I want to talk to you about a subject that is super exciting for some this time of year and not so super exciting for others.
More specifically, TAX REFUNDS.
Millions of people receive tax refunds every single year. Are you one of them?
I’m going to guess that you are since your reading this and do the happy dance for ya! 🙂
Yay! How exciting is that? A tax refund! Some financial relief! Finally! Right? You’ve struggled all year living paycheck to paycheck and finally you get to breathe a little! Whew!
However, I’m willing to bet you will not use it toward financial relief at all. How do I know this? Because I have been there.
I’ve received many tax refunds in my life and, I will be the first to admit, I have
probably never spent that money the wisest way.
I know your struggle Momma.
You’re a single mom working a full-time job, maybe 2 jobs, just trying to make ends meet. There is barely enough money left to live on after paying bills, if even enough for that. Taking the kids out to do anything fun is non-existent. Cut-off notices are a monthly thing and you’ve figured out just how far you can stretch each bill before it has to be paid. It’s a constant struggle to feed your family and provide them with the necessities they need. Birthdays and Holidays are looked at as struggles instead of joys because the first thing that comes to your mind when one or the other approaches is, how am I going to pay for this?
It is very hard to not go crazy irresponsible when you get that tax refund in your hands. I was always behind a few years on technology due to not being able to afford the latest and greatest electronics. So one of the things you may be tempted to but is that big screen TV or that game console your kids have been asking for. Maybe you want to reward yourself because you have worked hard all year working and raising those babies! You deserve to be treated to those new shoes, new clothes or spa day. Right?
Damn right, Momma.
I know your heart. I know what your thinking. You just want to be able to do things for yourself and your kids that you normally don’t get to do! You just want to treat yourselves because you never, ever get to. You want to buy your babies things they ask for because now you can actually say “Yes” instead of “No, we can’t afford that”. That was me. That is still me. And that’s great to want to do that! There is not a thing wrong with it. However, I’m going to give you some tips on how to set yourself up financially with that tax refund so that you CAN do these awesome things for you and your kids all throughout the year, not just at tax time.
I have made a list of positive ways to spend your tax refund and negative ways to avoid! Depending on your refund amount, you may or may not be able to do a lot of positive things with it, however, do as many as you can so you can make progress in the right direction!
POSITIVE WAYS TO SPEND YOUR TAX REFUND
EMERGENCY SAVINGS ACCOUNT
Start an emergency savings account. If you’re able, start out with $1,000. If you’re not able to do that, start out with what you are able to do. You can always add to it. It’s a good idea to start out with enough to cover your bills for about 3 months. That gives you plenty of time to find another job if something happens with your employment. Examples of emergency situations are NOT your favorite shopping store having a huge sale, your hair needing to be colored because you have 3 inches of new growth or eating out at your favorite restaurants. Emergency situations do however include your car breaking down, major appliances going out in your home, actual emergencies like trips to the ER, or things of that nature. Is it necessary? Is it urgent? Is it unexpected?
PAY OFF DEBT
Pay off any small loans you have. I have never had great credit so it has always been a blessing and a curse to be able to go to these quick small loan places to get money. You pay a ridiculous amount of interest at these places. If you have one of these loans you pay on every month, pay it off and don’t go back. I would recommend paying off the loan that has the highest interest rate.
Pay off credit cards. Cut them up and throw them away. You do not need them! They are evil!
PUT A HUGE CREDIT ON YOUR MONTHLY BILLS
Pay your rent up for a year! Can you imagine not having to pay rent for a whole year? Just think of that extra money and what you could do with it! Do you remember Christina Knaack? Last year she used her tax refund to pay her rent up for a whole month. She was a single mom of two working a minimum wage job. Christina has it figured out you guys! She gave herself $450 extra a month to work with. Christina has lived 2017 without having to struggle to pay rent! You rock Christina! Smart woman you are! She posted it on Facebook and her post went viral! Be the next Christina!
Aside from paying your rent up for a year, you could also pay on other bills. Pay a large chunk toward your car loan, or better yet, pay it off if your able. Pay a huge amount toward your utilities. Pay your car insurance for a year.
Tithe, give to a local charity or bless someone with a random act of kindness.
NEGATIVE WAYS TO SPEND YOUR TAX REFUND
Do not run out and buy a bunch of material things.
Do not book an expensive vacation that you can’t normally afford anyway. Don’t spend your tax refund on a huge elaborate costly trip. There are so many places and things you can do with your kids that are super affordable and won’t leave you broke and spending way more than necessary. A $2,000 tax refund does not justify a $4,000 vacation. Got me?
PURCHASING NEW DEBT
Do not use your tax refund as a down payment on a new debt. (I may or may not have done this last year. Hey I needed a new car, okay??)
Do not cash your check and go to the casino. I have done this. Many times. A part of my life that I have overcome. Thank you Lord. Do NOT go. The only way you are going to leave that place richer is if you never walk in the front door. In whatever way you enjoy gambling, just don’t do it.
LETTING IT SIT IN YOUR CHECKING ACCOUNT OR WALLET
This is one of the fastest ways to spend your refund. It will leave you wondering where on earth your money went and how it went so fast! Do not deposit all your refund in your account that you spend from daily. Do not leave it in your wallet so that it’s so easily accessible. Give every dollar of your tax refund a financially wise place to go.
There you go! The best tips I can give you from my own personal experiences. I’m a real party pooper aren’t I? 🙂
Before you start hating on me too bad, listen..
I’m not saying you shouldn’t do anything fun or treat your family to anything nice with your tax refund. I’m just saying be smart about it. Because if you’re not, I can tell you exactly what is going to happen. After all the money is gone, and the bills start coming back in, you’re going to find yourself struggling again, and those material things you bought are going to start being returned so that your electric don’t get cut off, or so the landlord don’t kick you out. You may even find yourself trying to pawn that awesome TV you had to have because you need the money. You will be posting things to sell on social media. I know how it works. I’ve been there!
Wouldn’t it be awesome to have some financial relief all year instead of just a few weeks out of the year? Or however long it takes you to blow through your tax return? 🙂
How you choose to spend your tax refund can make a huge difference on how your year goes financially. Just ask Christina Knaack.
Make it happen! You and your babies deserve it, Momma!
How do you plan on spending your tax refund?