WalletRehab - Ways to save money

This is important. And I really hope it becomes one of those meme things that fly around the net. Since the time the IRS was giving out refunds, whenever that was, if it started with Alexander Hamilton, I don’t know. People have been spending their refunds like they were gifts.

Refunds are not gifts.

People get their refunds and they think to myself, “Whoopie! It’s spending time!” And they run off to the electronics store, shopping mall or travel agency to spend their money. They imagine that it’s some sort of gift from the government for being good citizens. That if you don’t jaywalk, litter and are generally not a jerk to other people, the government will give you some money. That instead of receiving their Congressional Medal of Honors, people receive this anonymous check. And to continue to be good citizens, they need to go buy more stuff.

A Tax refund is your money returned to you.

But it’s not a gift. It’s not a present and it certainly is no award. It is your money being returned to you. At the beginning of the year, your income tax process ultimately is about you telling the government “Hey, I paid you too much!” The government checks its bank accounts, and sees your money lying around and says, “Oh right, sorry dude. I’m keeping the interest though.”

Your income tax refund is just another paycheck. It’s a paycheck that got delayed on your way home. That’s all it is. It is not money for a new iPod, Plasma television, car, vacation to the bahamas or those new earrings you’ve always wanted. It is money that should be used for your necessities and debts. I will cover what you should do with this paycheck in another post, but please, remember, your tax refund is not a gift.