Getting a chunk of money back from the Feds and/or State? What to do with that money? Here is the strategy we use each year. I will use a refund of $5,000 to make the math easier.
10% - $500 to Charity
10% - $500 hers
10% - $500 his (which really means hers)
70% - $3,500 to savings (retirement, emergency fund, regular savings)
So 20% will probably be going for wicker furniture or upgrading a bathroom or new drapes or some other exhilarating project. Sadly it probably won't be going towards a shopping spree at Victoria Secrets.
If we had any outstanding debt I would use at least half of the 70% for debt repayment.
Don't forget to consider adjusting your withholding with your payroll department so you get more money each paycheck instead of a large refund. The only reason we get a tax refund is because of the EIC (earned income credit) we get because of all the yard-apes.
Now all I have to do is finish gathering all my 2013 tax docs so I can get my refund. Lame I know. I should have done that by now.
What We Do With Our Tax Refund
February 10th, 2014 at 07:22 pm
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