We’re going to bypass that whole conversation about tax refunds really being money we all gave the government and now they’re giving it back to us without interest. Got it. Received. Heard.
But the truth is that people still enjoy receiving a tax refund. Why? A large sume of money that’s outside of our regular paycheck. It’s like winning a weak version of the lotto. But with this money comes great responsibility. Like…saving, investing and paying off debt. All of which should be done if we have a sizeable tax refund coming our way. The more we can put away for our retirement, a lofty goal or towards debt, the happier and prepared we’ll be. And side hustlers aren’t excluding from this practice. Because we’re constantly creating income streams, and much of the time it’s inconsistent, we have to be more mindful of how much we put away for a rainy day and any debt we’re trying to conquer.
I’m still playing around with the numbers for how I want to divvy of the money, but I’m pretty sure I’m going to be saving $1,700-$2,000 of my refund which is 2/3 of what I’m getting back. The rest will go to paying some of my student losn debt and I’m considering investing as well. I’ll keep you updated with this plan. Do you have yours?
So, after tax season comes tax return season or… audits… or money you may owe to the IRS. This is can be a touchy topic here, but bare with me. And I know lots of people will say, “If youre getting a tax return that means you gave too much money to the government interest free”. I don’t disagree with that statement but I’m not here for that arguement… yet. I’m here for those of you ladies who’ll be getting a return.
So, let’s talk about how we’ll be using that money and where it’ll be going. I’ve already received my state return and I had that directly deposited into my “Dream Home Fund”. That’s a bit of good news. If I actually see all of my $1,164 federal return, I’ve already decide to divide that into thirds.
One-third will be split among my savings. $194 will be going into my Emergency Fund. And I’ll drop the other $194 into my “Dream Home Fund”. Really trying to beef up that goal.
Another third will go into my business and personal development. Any remainder monies will go into my Emergency Fund.
And the final third, $388, will hang out in my account for 30 days. If in 30 days I cannot find a real need for something important I need to buy, then it will be split again among my savings accounts. Or maybe I’ll start my Travel Fund. I’ll see.
If you noticed, I have only two real goals for my tax returns. To save money and to invest in myself. That’s really it. That’s all I want to do. I don’t need to buy anything for myself or my apartment. Im not trying to go on some splurge and live it up. No shopping sprees for me.
I made a decision not to pay down student loan debt, because I just feel right now while I am making steady payments on time, it’s important I beef my savings, both long and short term. And when I get my saving accountd to where I want them to be in the near future, I’ll change gears.
Point is: my money has a plan because I’m on a mission. What’s the plan for your money?
The best money tip I can offer my fellow side hustlers is file your taxes today! The IRS is officially open and is accepting filings. And if you typically receive a refund, then there is no logical reason for you to wait to get yo’ money, honey!
Okay, let me take it down a notch.
If you file your taxes electronically with the IRS today, you should expect to get your refund in about three weeks. I’ve learned, much of the time, it’s a little sooner than that. And that’s good. Because February’s a short month. And for all us hourly employees, are checks from our full time jobs are not going to be as stocky as they would be if there were 30 or 31 days in February. So, getting your money now will help cover the cost of March’s rent and get you back on track — in case you weren’t — with paying all your bills on time and in full.
Now, I’m happy to say that I’ve estimated my tax refund a few times throughout January (like a dozen, really) and I’ll be getting the best refund I’ve EVER received. Yes! But, I’m an adult and I want t make sure I am as responsible with my government windfall as I can possibly be. So, 67% of my refund will be going into two separate savings accounts: my Dream Home Fund (self explanatory, right?) and my emergency fund. A girl’s gotta be ready for those rainy days. What about the remaining 33%? It’s going to cover any cost of rent and bills I may be short on given the fact that’s February is a short month. And to some personal investment for myself. Gotta be wiling to be a little better than the day before.