Ideas for your return
It’s about that time again, from January to April, folks are anxiously waiting for that precious piece of paper to be delivered: the W-2s. I do not speak from a tax expert’s point of view, but there is one main rule when it comes to W-2s; recheck all the information in all boxes and file early toavoid the rush. This chart demonstrates the categories of people that file their taxes early, how a refund is used and the average amount they receive. I think we all agree that a substantial tax return is pure bliss, and may come in handy for those postponed needs and wants. Although this money should aid us tomove ahead in our finances, we sometimes squander it in the wrong places and before you know it, we are right back to where we began.
Courtesy of TurboTax.com
Many treat their returns as a reward for their hard work and splurge on gifts for themselves, friends and family. Unless you’re in a comfortable financial situation, by all means go for it.
As a postgraduate student, I have become wiser with my spending via the support of business finance classes, and coaching of myfinancially erudite husband. The literature required for finance class is “ Rich Dad, Poor Dad” by Robert Kiyosaki.One of the take away lessons for me was let money work for you; this was an apparent theme throughout the book. This simply means that you should invest your earnings so that it can make you more money; treat it like an employer. As long as you make the necessary steps to become smarter with your money, you can be on top of those credit cards, and bills. But before you go and spend all that money in one place, I can suggest just two ideas of how you can make your tax return work for you.1. Open a Certificate of Deposit (CD) Account – A risk- free way of putting your money in the bank, it is insured by the FDIC. It is a timed account, where you deposit your money and just watch it grow. There are different time frames, even a little as 6 monthsThis is different from a saving account because you cannot readily access it before the time it matures, if you do, there are several penalty charges. These charges will ultimately encourage you to wait when the time is right. In my opinion, Ally Bank has the most effective and inexpensive CD accounts options with a high yield interest rate up to .95%, and this may sound strange, but there is no minimum to open. If you want to double-check the facts, go to www.bankrate.com to compare CD rates for banks. Other institutions normally require a minimum amount to deposit but this is where your tax return enters the picture. Since there’s no minimum amount, this gives you the power to open as many accounts and deposit as much as you want.
NOTE : Now, don’t be stingy with the amount because what you put is what you get, don’t short change yourself. My suggestion is to invest at least 35% of your return for the account you open. It‘s a very easy process that requires one transfer and signature from you.Read more aboutAlly’s CD accounts policies and offers
2. Pay off those high interest credit cards – We heard this a thousand times so there is absolutely no excuse to keep these monthly balances lingering throughout the rest of the year. Pay them off; get it over with, if you cannot pay the entire balance, pay at least half. I remember when I paid off my credit card with my tax refund one year, and it was one joyous moment. Just think about how relieved you will be when your monthly amount is reduced, thus more money in your pocket. The best way to approach this is thinking about the end result. If your credit card charges more than 20% for a purchase, then you need to reevaluate your credit circumstances as well as changing companies. Remember, you are the consumer; you hold the spending power, not credit card companies. You CAN negotiate your interest rates and your rewards program; don’t feel as if you have no say on YOUR credit cards.
NOTE:As a person that went through the struggles of default payments, I know how it is to have high interest rates and horrible credit. I recommended these steps because it worked for me and I am in charge of my finances. I do have credit cards, on certain occasions when I make a purchase; at least half or all amount is paid back a day or two. This way I don’t get charged with their interest rates and I still get miles for my purchase.
If you feel that you being overburden with high interest rates by your credit card company, conduct research and make a decision. Your finances are no joke.
Click here for information and to compare credit card interest rates andreward programs.
