We are just about to enter TAX REFUND TIME! I am so pumped. I love doing our taxes, and getting all that money back! Your Tax Refund is an amazing way to jump-start your 2016 Soon-To-Be Debt Free payoff plan. I touched a little bit on this subject last year, but I am back with a few more tips and suggestions, on how to best utilize your tax refund to finally get you out of debt.
How many times have you heard or said “If I only had a few thousand dollars, I could finally breathe!” Well, this is your chance. Your tax refund when used properly can completely change the direction your life is headed. Here’s how:
Do your taxes! Unless you have some crazy confusing tax delima, you should absolutely be doing your own taxes. I know a lot of people worry about not getting the most of their refund, or missing something and getting in trouble with the IRS. If you are using trust-worthy software you do not have to worry about those two things! I have always used TurboTax and have loved them. They offer audit protection, and before submitting your return it does its own internal evaluation and lets you know how likely you are to be audited. They also double check all of your work to make sure you did not miss anything! PLUS it costs next to nothing, and I get to do it on my own time in the comfort of my own home!
If you have debt(s) – you need to be using my 2016 Soon-To-Be Debt Free Workbook, to help you formulate your plan to finally them off, and become debt free. If you do not have a concrete vision you will just spend another year spinning your wheels, and you’ll be starting 2017 with the same (if not more) debts!
With your Tax Refund in Hand, Follow these Steps:
Get completely caught up on anything that is past due! If you are late on any payments, or are a few months behind get those up to date! These should already be listed on your debt priority list in the workbook! If they were not listed, you should re-exam what you DO have listed – and make some changes!!
If you have money leftover after getting caught up move onto step 2, with the rest of your tax refund.
Build your emergency fund up to $1,000. This is based on Dave Ramsey’s advice. Despite the desire to have more (coughMEcough) keep it at 1,000. The additional money is better spent paying down your debts!
If you have money leftover after getting caught up move onto step 3, with the rest of your tax refund.
PAY DOWN/OFF YOUR DEBTS! There are two ways you can do this, depending on how you set up your 2016 Soon-To-Be Debt Free workbook. You can either go to your 1st Debt Snowball sheet and pay down/off that debt and continue to the next and then the next (Obviously, depending on how much debt you have) OR you can use your debt priority list. These two pages should have some cross over between them!
please- resist the urge to use this years tax refund for any other purpose than paying off your debts! If you can really buckle down and become debt free, you can use all of your future tax returns for whatever you darn well please. BUT for right now, we are not debt free. Therefore, in order to become debt free we have to make the hard choices, and the not as exciting ones to secure our financial futures!
Becoming debt free is A LOT of hard-work (see more on there HERE) but I promise you that it will be so worth it in the end!!
If you are serious about taking control of your finances – and you want to really get out of debt, than make sure you grab this 40-page workbook – today!!