Are You Doing the Tax-Refund Dance?
(Contributed by Rose Hillbrand, Bank On Yourself User, Eagle Financial Solutions Employee)
That Safe Auto commercial with the people dancing around after receiving their tax refunds always makes me smile…then shake my head. It’s funny, and at the same time sad to me, to see people acting like a tax refund check is some amazing gift the government is granting them.
You do realize it’s YOUR money, right?? The government just happens to be “kind” enough to give a little bit of it back to you, after you’ve given them a nice, year-long interest-free loan! (And if you happened to make mistakes filling out those crazy complicated tax forms, they probably kept more of it than they should have.)
I’ve seen a couple of discussions of this on Facebook lately, sometimes led by wiser people who DO realize this fact. And there are always those who come back and say, “Yes, but… it’s money we weren’t counting on, and wouldn’t have saved anyway, that now we can use to buy something we’ve been needing/wanting!”
I have 2 responses to that:
1. Start a disciplined savings plan! (A Bank On Yourself policy is a great way to do that.)
2. Don’t spend it, as then it’s gone anyway – instead use your tax refund to start your Bank On Yourself plan. 🙂 Then do a better job of tax planning next year. Uncle Sam might not benefit, but YOU will! (And really – doesn’t he get enough of your money already?)
The funny thing is, I can actually relate to these people (the dancing ones), as I used to be the same way. When I had my first real job after college, and started earning decent money, I was always excited about that tax refund too. Not that I ever went on a spending spree – mind you. Usually I would use it to pay off debt or something like that. Which I’m sure is something many people do as well – and this is just another example of the disconnect our society has regarding finances. While the government was using that interest-free loan you gave them all year, YOU were paying interest on your own debt!
What if, instead of over-paying on your taxes, you kept your spending in check, and used your income wisely to avoid having debt in the first place? And what if, instead of using any surplus to buy more stuff you “had to have”, you put it into a safe vehicle, like a Bank On Yourself policy, and let it grow (TAX-FREE) for the time when you really HAD to have it?
Think how much better off our country would be if this was the default thought pattern instead…. Wow…. Hard to imagine, isn’t it?
Don’t get me wrong – I still overpay at times too – owning a small business that fluctuates a lot, it’s hard sometimes to estimate tax payments, and I don’t want to get slammed with a huge tax bill at the end of the year, but I do try to keep it to a minimum, and usually it works out to be pretty close.
I do, however, have my own dance…. The one that I do when I get my Bank On Yourself policy statements every year. 🙂
I suggest you take a closer look at Bank On Yourself, if you haven’t already, and maybe you’ll come up with your own dance – one you know you’ll get to do every year, since it doesn’t rely on hope, guesswork, correct completion of complicated forms, or loans to Uncle Sam.
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