A simple trick to keep from spending your tax refund frivolously.

2010 April 12

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Ever been to the supermarket with a raging appetite? You always end up with a cart full of Little Debbie Snack cakes, three kinds of chips, a bag of M&Ms, and nothing you need to get you through the week.

Now, think of this in terms of your tax refund. You get your tax refund and your appetite for stuff surges! You’ve been starving yourself of purchases for so long that you feel this urge to buy all those things you’ve been denying yourself for months.

Since my refund has come, I’ve been that hungry girl at the grocery store. I’ve bought a coffee table, purchased clothes for my kids, and gone out to eat several times. And as long as that refund continues to sit there unallocated, it will flitter away until it’s gone. To help take back control of my money, I need a game plan.

Some financial purists think that all the extra money should go towards savings or debt, but I believe in getting to a balanced place with my money. For too much of my life I haven’t been saving OR spending money in a responsible way. To finally achieve financial peace and security, we need to learn to do both.

To keep me balanced, my money is going to go to long, medium and short-term goals, like this:

My long-term goal is to get out of credit card debt.
My mid-range goal is my big anniversary trip next year.
My short-term goal need is an emergency fund.

With this plan, my tax refund goes towards something fun, like my big trip next year, while still paying attention to boring financial responsibilities like debt and my emergency fund.

So, hungry girl be gone! I’m back on my budget and determined to stay focused and on track for the rest of the year.

What are your plans for your tax refund? Or is it gone already?