Sunday, March 9, 2014

Post 101-What Rich and Poor People Do With Tax Returns

Good Morning to the Millions and Millions of Readers out there, I always like to laugh in the morning!

I first want to congratulate myself for sticking with this and getting to my 101st post.  It was almost 3 years to the day since I started my first post.  I was not as consistent as I could have been, skipping 2011 entirely and a 6 month stretch in 2012-2013, but life and priorities happen, but I'm certainly glad I'm here today.  I just want to thank those who read or comment, I hope it has helped or made you think about finance and fitness along the way.

I think the post below is the question that everyone asks as I did in my first post, well the journey continues.

                      What do I need to do to get fit and wealthy?


TAXES-The Rich and the Poor

Let me first start by saying I don't know what the Rich or Poor do with the money they receive from a refund from there tax returns.  Here's a few things from friends and family that I have seen along the way(no judging....yet)

  • I'm buying a new big screen TV(I have seen more empty big screen boxes on my daily walks now than I have seen during black Friday/Christmas time)
  • Buying a new/different car(Chances are your refund isn't big enough for a new car, so they are putting some money down and financing the rest)
  • I'm not sure what I'm going to do, probably just save it(doesn't seem like a bad idea at all)
  • I'm paying down my debt(I'm sick of paying the regular payment for what feels like the rest of my life.)
I look at the first 2 and think a couple things.  One is you know what I paid the government this whole year and I deserve this money, I have been saving the whole year I deserve something nice.  Another part of me thinks that's got to be the stupidest thing you can do with your money right now!  You have been paying the government extra all year long not earning any interest or paying down any extra debt and what did you do with the money, you couldn't get it out of your hands fast enough.  It's called delayed gratification.  I'm sure you want a new phone, new TV, new computer, new car, trip to Vegas.

As you can see by the length of each rant, I'm not a huge fan of the first 2 bullet points.  What do I think about the last 2 bullet points?

One is that this person must be making the right choices they are getting a return and saving the money or at least trying to eliminate some of there debt.  This person must be rich or know about how to handle there money and will be rich one day.  Another part of me says this person only thinks they know what is going on, why are they getting a refund, they decided it was a good idea for the government to hold on to there money while they had credit card debt at 19%, a car loan of $500 month, and eating ramen noodles so they didn't go over there grocery budget, they might be as blind as the person buying the new car!  

While this rant was similar to the above, I think they are making "weatlhy" decisions in the end.  While in theory I do think that it is a poor decision to loan the government money at 0% return, I believe that most Americans including myself find it a struggle to save money, so even though we are giving the money to the government to hold on to, we know they are pretty reliable and will give us what we have saved and feel pretty good about ourselves.

So in the end if you are waiting on your tax refund or already spent it on a big screen TV, keep this post in mind on your decision today and for the future.  If you think I'm crazy here's a post over at Get Rich Slowly that has a couple ideas as well.  

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