This time of year is always filled with either stress or delight. As companies close out their books and individuals file their taxes they feel the burden of the past year and question whether or not they paid enough or too much to the government. For some, there will be stress of paying an unexpected tax bill, while for others, a refund will be awarded.
So everyone knows we are on the same page- a refund isn’t necessarily a good thing and a tax bill isn’t bad. They just mean you either over-paid or under-paid the government. If you were like most w-2 employees, you probably paid the government your taxes according to your wages and if you gave to some charities and had some education or health write-offs you probably got to see a refund. If this is the case, you need to ask yourself “what will I do with it?”
This year my wife and I decided that our tax return will go to paying off the last of our debt. The temptation to spend the cash on fabulous gifts and toys is extremely tempting. I would love an indulgence into life of fun after being so strict the whole year. I think we all deserve a little reward for doing good deeds and being good tax payers. Being financially fit, however, requires a little bit of restraint. Set aside chunks of money from your return to allocate towards your goals. Know where the money is going. Pay down a debt or two and make sure you still allocate a small treat. You should always reward yourself, but be frugal.
Far too often people get depressed or let down when life doesn’t go their way. Diet programs get destroyed, bad habits return, and people lose hope when they work for a goal that is too far to touch I is out of reach. The small victories and rewards along the way remind you of the end goal and can keep you motivated. By having a small indulgence (maybe a movie night or purchase a new gadget) you can satisfy the natural tendency to enjoy money. By allocating resources accordingly you will make the strides needed and achieve your dreams.