Did you know that last year the average tax refund was $3,034? Oftentimes when people get a large tax refund, it’s treated like a little lottery winning. We have seen people get a large refund of $3,000, $4,000 or more but spend it all within a few months and not improve their financial situation much, if at all.
It’s okay to have some fun with your money – just don’t overdo it. As always, be sure to put your NEEDS ahead of your WANTS. Focus on paying down debt, fixing up your car or house, and increasing savings.
You may want to take a $2,000 family vacation, but if you need to get caught up on bills or increase your emergency savings, then that should take priority. Keep your tax refund plan simple – you don’t need a fancy computer program or a three-ring binder notebook; a large sticky note or index card will do. Budget where the money needs to go. After you take care of what needs to be done, add in some fun things. Having a plan for your refund will ensure that you use it the most productively and take a few more steps down the road of financial freedom!
Mark Foster is Director of Education with Credit Counseling of Arkansas (CCOA). CCOA is a member of the National Foundation for Credit Counseling. To schedule an appointment with a Certified Consumer Credit Counselor contact CCOA at 800.889.4916, or visit CCOA online at www.CCOAcares.com
Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.