A sudden influx of cash ahs the tendency to get us giddy, but that doesn’t mean that you have to necessarily be gleeful about it. The truth is that your tax refund is money that was yours all along. It was given to a government for their purposes, not yours. It’s time to take that power back. And you don’t take that power back by getting the money and then spending it on a huge TV. While the TV undoubtedly looks smashing in your living room, the reality is that it’s not helping your financial future one bit.
Now, you might be reading this and thinking — I’m young, I have all of the time in the world to be responsible. However, this is the perfect time to get responsible. Nobody wants to look back and wish that they had started sooner. Don’t regret — do it now. We’re not even saying that you have to be completely stuffy and never have any fun. But before you have fun, ask yourself this:
Do I have an emergency fund in case the worst happens (job loss, illnesses, sudden move?)?
Do I have all of my bills current, with a little extra?
Am I feeling financially secure right now?
Do I have a great stockpile of food in case there’s an emergency and I can’t get to the store?
If you can’t answer those questions with ease, then it’s highly likely that you’re not going to be able to run out and have fun just yet. Sure, you can disregard this advice…it’s your life, after all. But five years from now, you will be far happier with a fat savings account versus another shiny object that will be “uncool” in virtually no time at all.
Investing your tax refund wisely should be the focus, but what if you don’t know what you should do at all? This is where you actually need to step in and start thinking about short term savings accounts. There’s no need to lock your money away. Again, if you don’t have an emergency fund this is the perfect time to make one. It gives you a higher degree of peace of mind, and there’s really no price tag on that. It just depends on what you’re ultimately trying to do. You just have to make sure that you’re taking action as much as possible. That’s the only way that you’re going to be able to get anything done. You will have to make sure that you’re focusing on your goals.
We know that this advice isn’t what you want to hear at all. You want to do what your friends are doing. That’s okay — but it’s going to cost you big time. It would be better to make sure that you’re not doing that, if you possibly can. You have to make sure that you’re thinking about the bigger picture and plan accordingly. There’s nothing that says that you have to just jump in without any concept of what really matters. You have to make sure that you’re thinking completely about your goals over everyone else’s.
Ten years from now, your friends will not be the ones helping you make a deposit on your dream home. Your savings account will, if you take care of it. You might not think about it right now, but every single bit helps you in this journey. Make your life extraordinary on your own terms — the rest will come in time, we promise!