1. How much is in your savings??
Savings accounts are your reliable best friends. The best friend that you loan money to, and whenever you need that money back, they have it with interest! I'm going to make you a promise and I've always been told to never make a promise that I knew I couldn't keep. The promise is: NOTHING IS PROMISED! That's a promise that will stand true forever & ever.
Your job isn't promised!
Your car remaining functional isn't promised!
Your health isn't promised!
The tree behind your house standing tall and never falling on your roof isn't promised!
With these promises remaining true, it would be wise to have an emergency fund. Most investors suggest that you have 3 months of living expenses (food, bills, gas, etc.) in your emergency fund. Tax returns are a good time to get a head start on your emergency funds.
If you're savings account is looking decent, you can purchase a few c.d.s. I dont mean Glee's greatest hits. I mean Certificates of Deposits. You give the bank a certain amount of money and they hold it for a specific amount of time (6 months, 1 year, 5 years), and they give you that money back at a specific date (called the maturity date). C.D.'s offer higher interest rates than savings accounts, because you don't have as much access to the money you put in a C.D. as you would in a savings account.
You could also open an IRA, but we'll cross that bridge later on a future blog!
If you say, "Dreek, I'm already saving!" I would say "Where you going this year?" If you say "Savannah" or "North Georgia" I'm going to slap you in the mouth. The U.S.A. is a great country, but its sad how many people never leave their homes to visit the tons of attractions the country has to offer. This year, I decided to skip the international trips and focus on my homeland, so hopefully I will be going to New Orleans, D.C., Vegas, California, NYC, and Florida. If you work hard, I suggest that you play harder!!
3. Pay Down Debt
Do you have a car in the garage that just loses value every time you go for a ride? Pay the sucker off! That's one less bill every month which means more money to save! Pay a little toward your mortgage or student loan. Make sure you tell your loan holders that you want to apply this extra payment to your principal.
4. Home Improvements
Pay somebody or head to home depot and do some home improvement projects. If you've seen the world and your savings are bursting out of its seams, spend money on improving home base. Landscaping projects? Unfinished basements? Need fencing for your backyard? Want a pool?? I've already told you about my boy Brian at Summit Design & Build http://
The purpose of this blog is to encourage you to spend your tax return dollars on things that will be meaningful and long-lasting. Maybe you won't have a big tax return this year, but you would like one next year. Tell your HR person to change up your W4s. Lets say your married with 2 kids. If you just file Married with 0 deductions, your paycheck will be a little lighter but you'll get a big return next year. If you file single with 0 deductions, your paycheck will be a lot lighter, but your return will be greater! I look at it like a savings account! The Government in this case is the savings account, and you will get your money back next year in the form of a tax return. Plan with your families and spend wisely! & Oh yeah! Stay away from the Tax Return Ballers! & if you have the tendencies of a tax return baller.....CUT IT OUT!