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It’s NOT the Lottery Folks!

by Don Current on April 1, 2010

Lottery Ticket

photo courtesy doncav

I’ve seen quite a few posts on Facebook and heard a lot of people talking about their huge tax refunds and what they bought with it. It’s almost like they feel they’ve hit the lottery or gotten a big gift from Uncle Sam. I’ve got a little bad news for you if you feel that way about your return. It was always your money! You just let the government borrow it interest free all year, and they didn’t even give you a thank you note. Not only that but they made you fill out a bunch of paperwork, or pay someone else to do it for you, just to get your own money back!

Don’t let this happen to you again. You can make much better use of this money yourself if you spread it out through the year instead of blowing it all in one big lump. Adjust your W-4 so that you have the right amount of taxes taken out of your paychecks. The IRS even has a nice calculator to help you figure that out. Then once you do that, if you don’t know how you’re going to use all that extra money each month, then I suggest you open a special savings account just for that “extra” money. Deposit that money in the account each month. You can then blow it all come April, and you’ll have earned interest on it along the way. If you really want to be smart with it, you should save it as an emergency fund so you don’t have to rely on credit to do that.

Stop pretending that you’re getting a big bonus every April and start using that money to your advantage. The government will just miss spend it anyway!