For many of you, a refund is on its way. If you have one coming you have probably filed immediately rather than wait for April 15th. I know I did. I filed so early that I had to wait for the release of checks.
We’ve been poor folk for years now and that can serve a family in some ways, such as getting a plump refund each year. Last year we crossed the line by $12,000 from being considered in poverty to decently poor. Now that we are in this new category of poor we receive $4,000 less in refunds. I don’t really get it but years ago I had to sell my mother’s property for hundreds of thousands less than it was worth and in so doing, I now receive $3,000 around filing time in refunds for a “property loss”. This is a wonderful gift and I try to use it wisely each year.
One year we used it for new furniture and that was fun and extremely wasteful and unwise in the end. The bed broke completely (even though I got a sturdy one for all of us) and wound up on the curb since and I have couch regret. I purchased a cranberry red couch when I had one little son and now I have two big boys and wish I had a brown couch to hide the jelly and chocolate smears. I spent thousands on furniture that didn’t last or doesn’t please me anymore. I look back now and wish I had chosen thrift store furniture. I have a sturdy oak entertainment cabinet that I bought at a GoodWill for $150 and it is the best piece of furniture ever. I also have an oak dining table and chairs that I found on Craigslist for $100 and that set is also sturdy and attractive. All in all, I wasted a refund and learned a big lesson.
Refunds come once a year and they are gifts to do wise things with. My biggest suggestion is putting it in savings. It is the fastest way to build big savings overnight. If you are in debt I still suggest putting it in savings. All your money is probably going toward paying off bills and this way you will have that emergency fund in place and one less thing to worry about.
This year we had a little debt. I have a credit card with our bank that was once a secured card and over the years it turned into a regular credit card and kept being increased until it was very large and I had to call the bank and say, “please stop!” By then I had too big of a card.
The other debt was a tread climber. Usually, we pay all things in cash but we decided to try this financing gig. We bought it through the companies credit. It was one of those deals in that you have 18 months to pay it off at zero interest. The catch is that if you don’t pay it off in this time you have to pay 29% interest and you will be charged back interest from the very beginning even all the months you have already paid! What a rip off right? Not only that, but they send you a bill each month that is so low that there is no way you would ever pay off the whole amount in time if you only paid that amount and as the bill gets paid each month the payments required get smaller to ensure that you don’t pay it off in time. It is a real con. So, if you don’t pay it off, and you won’t if you follow their payment plan, you will be paying for years and in the end, a $2,500 product will cost you $5,000 or more.
So, my refunds arrived in my account and I paid off the credit card, the tread climber, I paid small bills to the accountant, my editor, I paid karate classes, chiropractic visits, and then when everything was paid I went shopping and stocked up my toiletries and pantries and freezer. I also started a small household savings linked to the checking account. We have a big savings for house buying that is in a separate bank and untouchable and we needed a little savings we could access for small things.
Having done all this put us in such a great place financially that I can now save plenty each month and have some for fun. We have also found an adorable little home and I have had plenty of money in my accounts for “good faith” payments and appraisals. This is another blog that I will tell as soon as I have keys in hand.
This blog may seem boring but I wanted to illustrate how important that refund is and if used wisely it can really change your monthly budget. It is a yearly gift to get you ahead or clear up small debts, to start an emergency fund or do repairs to your home or car. I know that it is tempting to go ape wild and shop for fun stuff, new furniture and go out and party it up. You can do some of this too. Just set aside some fun money out of it. We definitely had some fun. I ordered gifts for my godson’s new baby on the way and books for my son’s godmother. I ordered Sammy’s birthday toys and I ordered myself The Daily Bible with Joyce Meyers. Everyone was blessed.
You may wonder how much I had, it sounds like a lot from all my activity. I received a little over $4,000.
It feels so good to have all the little debts cleared up, household savings, stocked pantries, and cupboards. It feels good to gift others and ourselves. It especially feels good to have a clear slate financially for the beginning of the year.
Be wise with your money and enjoy the peace.