I just got my tax return back earlier this week and so many thoughts crossed my mind about what I could do with it. But then I remembered that I’m trying to be a responsible adult and should really think about my options and the smart thing to do with the money. And I know talking about money and finances isn’t very “trendy”, but our lives pretty much revolve around it. And I know a lot of us mid-twenties women are ballin’ on a budget and have student loan debt or a savings account we’re trying to build or a car payment we’re trying to pay off, but it’s just so much easier and instantly gratifying to go spend it on a new purse or a shopping spree!
To be completely transparent, here is what I thought about using my tax return for:
- I’m going on a ski trip in Colorado at the end of the month that will be expensive
- Or I could use it to help pay off my car that I am upside down in (I really want a new car like yesterday but them shits are expensive)
- pay off my credit card debt
- put it into my high APY savings account (shout out Ally Bank with their 2.20% APY!!) and let it grow over time and save it for an emergency or a big purchase later on down the road of life
- I could just do nothing with it and let it merge with the money in my checking account and eventually spend it on whatever
- use part of it to get my eyebrows microbladed finally
- use part of it to buy a Roomba so I won’t have to sweep the house everyday anymore
- go to the Outlet Mall and go on a shopping spree to update my wardrobe
- or I could use it to buy the Louis Vuitton Neverfull GM bag that I’ve always wanted…
Not gonna lie, the latter option was the most tempting! But like I said, I’m trying to be a responsible adult. Yes, it is way more fun to go on a shopping spree or buy a new designer bag. But in the end, won’t it be so much more satisfying to pay off a credit card debt or put it into your savings account, or put it into your car payment so you can either 1.) not have a car payment anymore and have an extra $300-$600 a month or 2.) be able to afford a new car with a reasonable monthly payment?
I keep bringing up the car because my current car is an absolute P.O.S.!! I’ve had it for not even 3 years and I’ve already had to replace the battery, THE ENTIRE ENGINE, the tires several times because the alignment is messed up and wears the tires down, the brakes, and it’s just really ugly and I hate it… So my top priority right now is to get out of that car and into a new one. My car is worth about $6,000, BUT I owe $9,000 on it still… So that’s a $3,000 difference I need to come up with before I can trade it in or else I’ll have car payments at around $600-$700 a month, which I can’t afford. Sorry for the rant, I just feel like I can really open up to you 😉
Or if you are fine with your car and have already paid it off, you could put your tax return money into your credit card debt that you have and not have to pay interest on it anymore. Or you could put it into a savings account – side note, I would really suggest getting an Ally Savings Account because 1.) it has no annual or start up fees, 2.) it has no minimum balance requirements to open up, and 3.) it has one of the highest Annual Percentage Yield (APY) at 2.20%, so it’s literally a free savings account that will give you money – and you can leave the money in there to grow and use for a big purchase later on or in case of emergencies. Or you could put the money towards your student loan and be closer to paying it off! Those are all really responsible, adult ways to spend the money!
Or you could split the money and use it towards different things, which is what I decided to do with my tax return money. I’m going to use part of it to get my eyebrows microbladed and I’m going to put the other half in my savings account. Now, I’m not a financial expert or an accountant or money advisor, so please take my financial opinions with a grain of salt. But, I know a lot of women out there with similar demographics to mine (20’s-30’s, 9-5 office job making 5 figures, student loan and credit card debt, budgeting, paying for your own bills, not married, not where you want to be financially) that don’t want your money situation to control your lifestyle more than it has to.
So my advice would be to 1.) put all of the tax return money towards a responsible, adult clause (you will be thankful later), or 2.) put at least half of the money towards a responsible adult clause and use the other half to treat-yo-self. Don’t spend it all on treat-yo-self or else you will be absolutely kicking yourself in the future! I know from experience 🙁 This year I have decided to spend about ⅓ of my tax return money on finally getting my eyebrows microbladed and the other ⅔ is going into my savings! I’m looking at the microbladed eyebrows as an investment because I won’t have to spend money on eyebrow pencils as often and I’m all about investing in yourself and your appearance! Also, I’m putting the money into my savings account so that when the time comes, I can either pay my car off all at once and avoid interest fees or I can use it as a down payment on a new car!
Good luck with your adulting! You’ll thank me later when you’re debt-free, have a $0 monthly car payment, and can spend all that extra money on treating yo-self instead of just once a year when you get your tax return!!! 😉