I’ve seen a lot of comments on Facebook about my friends getting their tax refunds or how they can’t wait to get their tax refund soon! A refund is always great! I don’t think anyone enjoys having to write the IRS a check!
Some people have plans to pay off a credit card, place it in savings, or buy a flat screen T.V.
Many people that I have spoken to at our free financial education seminars, say they plan to make a large credit card payment. If you are thinking about doing the same, I have a little bit of advice for you. Here’s a hypothetical example. If you have a 10k balance and you want to make a $1,500 payment, I would hold off on that because most of the $1,500 will go to interest and not make much of a difference in your goal of paying off the card. I suggest that you call the credit card company and ask for a rate reduction. It sounds impossible or you might think that they will say no, but you would be surprised. They don’t want to lose interest income from you and they do not want to lose you to another credit card company (balance transfer). Once you get the rate reduced, start making some hefty monthly payments and try to pay it down as soon as you can. If this means you have to cut off your cable for a while to add more money to the payment, do it! Turn it back on when you finally pay the card off. As for the $1,500 in this example, keep it in your savings account for an emergency, because the last thing you want to do is not have emergency funds and have to put additional charges on the credit card you are trying to pay off.
So, what are your tax refund plans? Do tell!
Painting the exterior of our house…in desperate need