So now that you’ve got your taxes all taken care of (hopefully for free), you’re probably thinking of all the ways you could spend that sweet tax return. Most of us will go for the materialistic items first, like new shoes or that video game you’ve always wanted. With that much money in your hands, it’s hard not to go crazy. But think about it, what could you really use that extra money for?
Take a look at how much you’ve gotten back. Now take a look at all of your debts and compare it to that “giant” lump of money you’ve received. It seems like an insignificant sum, now doesn’t it?
The key with tax returns (or any amount of money) is to budget it wisely. Even though money is the root of all evil, we still want to own and swim in a giant pool of it, much like Scrooge McDuck. These fantasies keep us from seeing what’s important: fucking creditors.
Whether it’s credit cards or student loans, we shouldn’t forget about our debts. Credit cards obviously take priority, since interest can really kick your ass in the future. That’s what’s so unfortunate about credit cards; it’s money that you don’t have and that you think you’ll have eventually but you forget about it. Student loans don’t have to be paid until after you graduate, but unsubsidized loans are already accruing interest. Take a look at what kinds of loans you’re taking out.
Now, you probably shouldn’t use all of your taxes to pay off credit cards and student loans, but I’d use about 60% on these debts. It’ll make you feel better and it’ll look good for your credit score.
After paying parts of that off, try and put away another 20% into your savings. Think of it as a rainy day fund. If you end up completely broke or have some money for emergency medical expenses, you’ll have some money saved up for when you need it. Hopefully you have a good bank that gives you a decent amount of interest on your savings. I know Wells Fargo doesn’t give more than 3%, and you have to be in a special program for that “deal.”
So now you’ve spent 80% on debts and savings, it’s time to look at what you really need. You can pay off your bills of course, but that’s what your regular paycheck is for. Maybe you need a new mattress or a kitchen table. This is where you can splurge a little. There’s no harm in getting new jeans if your old ones have a broken zipper.
Maybe you can even get that dog you’ve always wanted. With that extra money you can get them spayed or neutered and get them vaccinated. Or you can get them a little spike collar to dress them up a little. It’s funnier on smaller dogs, because we know they can’t protect shit.
Concerned about how you’ll look in that swimsuit this summer? Check out Planet Fitness! They’ve got a lot of initiation fees, but it’s only $10 a month and those fees can be covered by that newly acquired dough. You could always join other gyms, but if you just want to check out some classes, head over to Groupon.com. They’ve got deals on multiple classes of all types. You can even take pole dancing classes at half price. You know you’ve always been curious.