The obvious answer here seems to be “nothing”. But actually, it’s a big something.
I know many people who tell me that getting a big tax refund is actually a part of their “budget”, because it means they know that every April they can take a family vacation or upgrade their big screen TV or pay off some more debt or whatever it is in their case.
The first bit of honest truth is that these people don’t have a budget. A budget is something you create and live by, with periodic adjustments, which is intended to keep you living within your means and actually saving and investing for your future as well. It doesn’t allow for splurging without planning.
(On that note, before you all click the back button in disgust J, it is still possible with a budget to take a family vacation and upgrade your TV, you just have to plan for it and allocate a bit each paycheck instead of getting wild and crazy every April!)
Last off topic bit about budgeting, make sure that whatever budget form you use, that it starts with you putting down your Gross Income at the top, and the VERY NEXT THING should be how much you can save and invest. If that is 10% of your gross income, you have a pretty good chance of reaching some of your goals. If it’s 20%, you have really good chance of reaching all of your goals. After that comes taxes, housing, insurance, utilities and everything else. Most budget forms have taxes and such right after income, with saving at the bottom. That says “save whatever is left over”, while the message should be “pay yourself first.” Ok, I’ll get off that soapbox for now.
Why don’t you want a big refund? Simple, because Read More …
Technorati Tags: tax deduction, tax rebate, tax refund, US finance
July 12th, 2010 |
, let’s point out that anyone can contribute to it. That is, you can be our future student’s mom and dad, or grandma and grandpa, or godparents, or just family friends wanting to give a shower gift.
