Taxes.
Take time to have a spending plan meeting around your return. Look at it this way… Uncle Sam is trying to help you save! Start wisely and set up a direct deposit to get your refund quicker. Did you know that you can separate your refund into 3 different accounts as well as purchase US Savings Bonds? Completing the IRS Form 8888, Allocation of Refund, at the time of filing gives you an option to separate and save early on. You can divide your refund and be less likely to spend the money as it’s pre-allocated into purposeful accounts.
This is the financial tool I advocate for the most. I have many readers that continue to be shocked that we choose to keep a cash emergency fund vs use credit cards. All I can say is that everyone knows what works best for themselves, but to be able to have the peace of mind that their is emergency money provide, money that you won’t pay interest on, is a huge sigh of relief. Trust me, emergencies will happen. There are many emergencies that have come up for us (car repairs, loss of job, furlough days, out of area deaths in the family, medications and doctor’s sick appointments, storm preparations, etc.) and I’m sure to can list a few that you wish you had an emergency fund for. So, how much is up to you. Many people are comfortable with $1,000 in a separate account and ideally if you can reach to have 3-6 months of savings then you will be secure if your source of family income lost their job, etc.
Do you have debt? That’s the next step to take stretching your refund. Thanks to Dave Ramsey, we use the snowball method to pay down debt. Simply put, start with the smallest debt (which with your tax refund) may mean you are able to payoff multiple debts this year. This also gives you the mental motivation and inspiration toward paying down continual debt throughout the year.
Have you been putting off things you need? According to the National Center for Healthy Statistics, 1 in 4 of us to put off medical, dental, and mental health needs, because of money. So, why not use allocate your refund for those needs. I’m talking about taking care of yourself physically and mentally so that you can be present to make healthy decisions. A hefty refund can be a strong start toward goal setting. So, if you are healthy and need a new coat, clothes, or mattress then don’t feel guilty in spending some of that refund on your needs. 
These are great tips. It seems like my refund goes into saving for the house taxes soon to come, paying extra on some bills, and if I’m lucky maybe buying something small. I can’t wait to reach a point where I can actually pay all my bills with my take-home pay so that I can vacation with a refund or purchase something I’ve been longing for for ages. In time…
Libby recently posted…Craft Room Makeover (Part 4) {Video}
Thanks Libby. I hear you it’s a journey and until you do reach that point take small stay cations, something to keep you motivated.