Having a budget and sticking to it is one of the most crucial skills to have. If we’re to insure that all needs are met, budgeting is a necessity. Interestingly, we tend to overlook the need to budget refunds though. There’s nothing wrong with that. However, sometimes it helps to view your refund as a yearlong financial gain opportunity. Follow along to learn how to turn your refund into sustainable savings.
Rule Number One: Your Refund Is Not a Bonus
Budgeting money means figuring out when and where money will be spent as well as where it can be saved. This is why as soon as you learn your upcoming refund amount you should figure it in as income, as opposed to play money.
Rule Number Two: First Things First
Before you begin to budget your refund, look around and see if you have any urgent needs that should be addressed and direct a portion of your proceeds to cover that pressing situation. Also, consider using your refund to pay down debt as it may free up room in your budget in future months. Whatever you have left over afterwards is what you should factor into your budget.
Rule Number Three: Prevention is Priceless.
Using a tax refund wisely and setting aside an emergency fund for a rainy day is a great way to stay ahead of troubled financial times. Unexpected expenses from emergency medical procedures or car repair can leave any budget in a state of disarray, if you’re not prepared. At the end of the day, it’s easier to prepare for debt than to dig out of it.
Rule Number Four: Don’t Forget to Have Fun
Since tax refunds can represent a financial windfall, it’s tempting to spend, spend, spend. On the other hand, if you budget your entire refund as if it never happened, at some point you might feel the urge to splurge. A great way to prevent this is to set aside a small portion of your refund to have fun with. Just remember to stick with the budget and not go overboard. Prioritize your needs first and then use what is left over, not the other way around.
One more thing, if you’ve allocated part of your refund budget to new clothes you’ll be happy to know that we offer trendy and high quality clothes for the entire family at near wholesale prices. We hope that this post has been beneficial for you. If you have any questions please share them in the comments.