“Beware of little expenses; a small leak will sink a great ship.” – Benjamin Franklin
Anyways, that’s a different topic altogether.
I hope many of you by this time filed your taxes some might have gotten your tax refunds. Unfortunately some of you might not be in the receiving end and owed to Uncle Sam. According to me, almost all the time you should be able to get a refund if you plan and file properly. I never paid Uncle sam, always got refund atmost break even.
Did you get a tax refund?!
Don’t think its a free money, its your money and you own it. I know its pretty exciting to get a big chunk of change at this time of year. Many already have plans for it. Whatever plans you have please make a wise decision and use it properly.
What did I do? Let me tell you what I did. I got my refund 2 weeks ago and planned to pay part of my 0% balance transfer credit card debt. You might wonder how come I have a debt? Everybody has debt and its a good thing if you manage it well. My debt on 0% balance transfer card is about getting free money for a year and leverage it to invest on real estate or Cd’s to get a good gain from it. If you are smart, you can do the same. Don’t throw away your free 0% balance transfers offer. You won’t find them these days because of credit problem.
If you do get those deals, select a good card with $0 balance transfer and put the money either in Cd’s or invest on good vehicle like Real estate. That’s one way of getting free money without no interest. No body lend money for free these days.So I plan to use that refund to pay off my debt but I am not doing it immediately.
I opened a WAMU CD account which is going to pay 4% interest on 6 months CD until 2 days ago(not anymore). Then take it out and payoff the debt. Why did I do that? I know I still have time to payoff my credit card debt till Nov. What is the benefit I am going to get by paying it off now? SO I leveraging the time and money in my favor to gain every penny of it. Hope you got the point.What you can do?
I would suggest you to think twice before you make a decision. Jot down your current situation and list the options you have and take the right step. These are my suggestions: 1. If you have a high credit card debt, just pay it off or reduce the amount by paying it off. 2. If you don’t have any CC debt, paying off your Auto Loan or any personal loan which might have interest rate higher than CD can yield. Don’t payoff your Home loan unless its closes off your loan. 3. If you don’t have any debts, think about short term needs. If you don’t have short term emergency savings.
Start one right now with part of the amount as CD. Then use the other part to either add to your IRA account or kids education account. If a vacation is long due, plan for it but put this money as CD for that time being.If you planning to jump to any investment vehicle and test the water. Don’t dump all the amount into it. First test the waters with small amount and once comfortable start adding it in slowly.
To conclude, Money doesn’t find us easily. If it finds its way, don’t let it go easily.