Maximizing Your Tax Refund
Last year, about 80% of Americans received a tax refund. Were you one of them? Will you receive one this year? If so, it can be a tremendous tool to start your journey toward living your fully funded life!
Before You Spend It, Plan It
I used to have my tax refund spent sixteen different ways by the time it actually arrived. It was assigned to pay for Christmas, vacation, clothes, credit card bills, student loan payments, car payments, a new appliance, a new electronic device, etc.
In addition to having spent the refund sixteen different ways, I had already made all of the purchases via credit cards or other forms of loans. When the refund actually arrived, it was woefully inadequate to cover all of my crazy spending. Talk about feeling miserable! Is anyone reading this feeling my pain, or am I the only one who has done this?
When I decided once and for all to take control of my finances, I realized the root cause of my problem. What was the root cause and the reason for all of my crazy spending? I did not have a PLAN!
Before you spend your tax refund, plan out the spending! I highly recommend that you use the Mini-Budget Form (Excel) to plan your spending. Enter the amount of the tax refund at the top, and spend it to exactly zero. Remember: INCOME – OUTGO = EXACTLY ZERO.
Start planning now – BUT don’t start spending just yet. We are still in the planning stages.
Build the Wall
Next, you need to build a wall of protection! When maximizing your tax refund, there are three categories that can help you build this wall:
(1) Save it, (2) Reduce Debt, (3) Invest it
Check out the above video for all the details on building the wall with these three paths.
Fulfill Some of Your Dreams!
Since the word FUN is in the middle of refund, make sure to have a little fun and fulfill some of your dreams!
Your tax refund could allow you to be generous and bless others, have a fun day with your family, or contribute to funding a dream. What dreams do you have? What will it take to accomplish them?
Here are some good questions to ask yourself to fire up your dreams again:
- What opportunities do you want to provide to my children?
- What trips do I want to take?
- Who do I want to bless? What do I want to bless them with?
- What type of house do I want to live in?
- Where do I want to live?
- What career(s) do I want to pursue?
- When do I want to retire?