Tax time is right around the corner.
For many people, this means that a sizable tax refund is also right around the corner.
As a financial coach who has seen *everything*, let me tell you what many people do with a lump sum dropped into their account.
They go on a vacation they have been thinking about for months.
They put a down payment on a car.
They put it in their checking account, and it dries up in a few months.
If you suspect this could be you in a couple months, let me offer you a bit of coaching on this one.
If you are planning to receive hundreds or thousands of dollars, I recommend that you ask yourself how this tax refund could help stabilize your finances.
See–as you are improving with money, the biggest enemy that you have is inconsistent expenses.
Here’s what I mean with inconsistent expenses…
You have a budget in place, then the unexpected pops up–car repair, dental bills or a home repair that must be addressed. These unplanned expenses can make dramatic changes from month to month.
Even if you are doing well with daily expenses, groceries and restaurants–these surprises can leave you deflated! Always waiting for the next month to catch up…
The way we create peace in our finances is to stabilize them. We plan for expenses, and we do our best to pay off debt.
Here are some ideas on how you could use a tax refund to stabilize your finances:
- Set up an Emergency Fund so that you don’t have to rely on credit cards for unexpected expenses.
- Fund your Sinking Funds, specifically: Car repair fund, home maintenance fund, Christmas, medical expenses, etc.
- Pay down a high interest debt. As you know, interest rates are sky high right now, so if you have a high interest debt, this may be a great time to chip away at it!
There is no right way but you get a feel for what right looks like for your family. Essentially, it is an action that allows you to use this “now money” for “future peace.”
I hope this insight helps you and your family to make the most of the opportunity! If you feel like you could use a bit of a plan and accountability, schedule a call, and I can share the different options for working together.
