Now that we are in the midst of tax season, members of the Finance Collective are here to give you tips and tricks on how best to take care of yours taxes this year. This week's tidbit of advice comes from Everything Finance and is about thinking about your tax refund in a new way and putting it to good use:
When you receive a significant tax refund, it can be easy to think of it as a bonus or free money, which is likely why so many opt to spend it on something extraneous. Instead of running out and spending it as soon as you receive a check in the mail, stop and take the time to really think about what that money means.
It's not extra money the government is merely giving you. It really means you gave (or the government kept) more of your hard-earned money than you needed to. Think about the fact that your refund is money you worked hard for, like another paycheck. By doing so, you might be more cautious with what you choose to spend it on.
PUT IT AWAY
Out of sight, out of mind, couldn't be a truer statement. If you choose to put your refund right into your checking account, you make it all too easy to spend it. Opt to deposit your tax refund directly into an investment or savings account that isn't easily reachable. By directly depositing it, you won't have an opportunity to touch it or spend it in the first place. Moreover, depending on the savings account, you might not have access to it once it's deposited, which is a surefire way to make sure you don't waste it." -Everything Finance
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