Tax return regretinitis—the condition of regret caused by wasting a tax return.
Many who experience tax return regretinitus received their return without a plan on how they use it. So they splurged on a few items here, went out to several dinners there, and, before they knew it, had spent every last cent of their return.
And then they look at the balance on their credit card. They look at their retirement account. They look at their 529 Plan. And they are hint with a sense of regret.
So how do you avoid tax return regretinitis? How can you increase the odds that you will find contentment in your financial decision? Have a plan on how you will use your money. Know how you will use it before the money ever hits your bank account. Here are a few suggestions as you put together your plan:
- Give some of it away. God designed us, not to be hoarders, but conduits through which His generosity flows. Give some of it to your local church or charity. Buy a gift card and surprise someone with it. One of the best ways to avoid tax return regretinitis is to give some of your tax return away.
- Pay down debt. Focus on the interest you will not have to pay if you reduce your debt. Consider the future money will you be able to keep in your pockets because you decided to reduce your debt. It always feels good to pay down debt. But when you consider the long-term consequences, the happiness can increase tenfold.
- Put it toward your retirement. Like paying down debt, focus on the future consequences. You may have heard a financial term called compounding. If not, check out this post. Give a little bit of money a long time and the results can be dramatic.
- Set it aside for college. Do you have kids? Then you probably feel the weight of future college expenses. You do not want your kids challenged with the same type of debt load many Millennials experienced, that maybe you experienced. The good news is that most 529 Plans don’t take a lot of money to get started, and they are pretty easy to set up. The most difficult part is choosing the 529 Plan in which you want to invest. Here is a post to help.
- Get started on getting rid of your mortgage. If you have all of the prior items covered, let me congratulate you! You have made some significant steps in your finances. What’s next? Consider getting rid of your mortgage. Imagine what life would be like without mortgage payments. How much more generous with your money could you be? To avoid tax return regretinitus, take a step toward realizing that dream by paying down some principle on your mortgage.
Tax return regretinitis. Most of us have experienced it at some point. But it doesn’t have to happen this year. Create a plan for your tax return before it arrives, and enjoy the satisfaction of making a good financial decision.