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Tax time has always been one of my favorite times of the year. I actually like doing my own taxes, and we usually do something big with our refund like buy a new piece of furniture or put it towards a family trip. This year’s refund isn’t nearly as big as previous years because I am self employed, so I came to the realization that maximizing was my best option. I started to research, and eventually worked out the best way for me to make the most of our refund this year while still splurging a little. Read on for tips to help stretch your refund and fund the things you need!
The first thing I am doing with our refund is prioritizing. There are so many things I could do with it, but if I did it would be gone almost immediately. This year is all about saving and stretching, so before I even had money in hand my husband and I sat down and strategized. There are things we want, and then there are things we need, so we narrowed it down to a few “wants” and a few “needs” before cutting out the rest. By prioritizing where it is most needed, we can be sure that we aren’t using the money irresponsibly.
Our big purchase this year was a new couch to replace the one we have had for over 7 years. It wasn’t exactly falling apart, but it was well beyond replacement time. We could have replaced it earlier, but since a couch is a big investment for us that will be around for quite a while, we decided to wait for our tax refund so we could get the one that we really wanted.
Our other purchase was out of necessity, because I have needed a new business phone line for quite a while. Up until now, I have always used my personal phone for business, and this year I have vowed to do things more officially since it is starting to provide more and more income for our family. Since we splurged on the couch, we needed to save a little on the phone, so I went with a Walmart Family Mobile PLUS plan. It includes Unlimited Talk, Text, and Data, and comes with up to 10GB of 4G LTE then 2G. I picked out the Samsung Galaxy ON5 smartphone for just $119.00, and then a SIM Kit for $19.88. There was no deposit required which is amazing in itself, and since Family Mobile bills you later, you only have to pay that $19.88 when you sign up. How’s that for maximizing my refund?
My new PLUS plan costs just $49.88 per month, and I also get a free VUDU movie credit every month (a $7 value, the same as a new release rental) so we can put our new couch to good use during family movie nights! This new plan is perfect for my business communication, and with the larger bucket of data I can do everything I need on my new phone!
This has by far been the best method for me. Instead of letting one lump sum sit in my bank account, tempting me to use it, we divide the money up into these groups: Save, Debt, Extra, and Vacation. The Debt money is the largest portion of our refund. It goes into our bank account to take care of credit card bills and any other outstanding debt we might have, which helps us in two ways: 1) We knock out monthly payments, which erases $200 per month in bills, and 2) It raises our debt ratio threshold and our credit score by having more available credit. Sweet, right?
For the other categories, the followed similar paths – the “save” group went into our secondary account that we don’t touch unless we have to. The “Extra” group is money that we can use for anything, whether it be a new piece of furniture or a night out. The “Vacation” group is to be put towards our next vacation, which we add to every now and then but don’t take out.
Are you an impulse buyer like I am? If so, it is a smart idea to instill a mandatory “cool off” period before spending your refund on things you might not really need. Sure, the new gaming console you have been drooling over is finally within reach, but instead of buying it the minute your funds come through, wait a week. Chances are if you really shouldn’t buy it, reality will set in and you will decide not to use it.
Forget about it
The simplest way to ensure you don’t spend it all too quickly? Take a portion out, put it somewhere, and forget about it. You can invest it, open a new savings account, buy stock, basically anything that incentivizes not spending it. Interest earning accounts are the best, but this can even be something as simple as stashing it in a cupboard and out of sight.
There are SO many more ways to maximize your tax refund, but for me these are a start! What are some of your favorite methods?
Disclaimer: All prices for phones and plans included in this post are accurate as of the date of posting; however, these prices are subject to change. Please refer to http://cbi.as/7e-jr or your local Walmart for current pricing. You can find Walmart Family Mobile at your local Walmart store.