Tax refund vacations
I read an article the other day in the aftermath of the disastrous NBA all-stars game in Las Vegas that made caustic reference to "baby's mamas" there on "tax refund vacations".
While I'm not inclined to comment on whether or not the author's stereotyping is warranted, the phrase "tax refund vacations" has stuck with me since.
I can recall that in my late teens through early twenties, we all tended to claim zero on our W4s. We, in effect, used the IRS accounts as a sort of savings account we'd deposit into throughout the year and then close at the beginning of the next. We'd party on it, make large purchases, take "tax refund vacations", etc. And in short order it was gone.
I was taught to do this by my parents. When I was a kid, we'd always look forward to tax refund season for similar reasons.
This is a sign of where I came from, the class I was born into, and the sorts of lessons I learned. And I like to think I'm progressing beyond such lower middle class/lower class thinking and behavior.
Why would a person, again and again, sabotage their future by not either using the large tax refund to pay off bills, investing in their future, or reducing what they pay in income tax to the smallest amount possible and leveraging that extra amount throughout the year?
Now, not doing so seems inconceivable. Each year I look at how much I paid in Fed income tax and estimate how much I will likely be paying the next year. I then try to only put in that much and not overpay. If that increases my net income, then that "extra" money gets added to how much goes into a savings or 401k or elsewhere, to work for me.
10% of your net pay should be saved, invested, etc. This is very basic stuff here. If you net $2000 a paycheck, put $200 of it aside, minimum, per pay cycle, and don't touch it. If that cuts into your lifestyle, change your lifestyle.
It's about self-discipline, really. And sometimes it's about sacrifice. And it has become very clear to me in the past decade that this is part of what separates those that have from those that don't have.
Self-discipline and sacrifice... no "tax refund vacations".
While I'm not inclined to comment on whether or not the author's stereotyping is warranted, the phrase "tax refund vacations" has stuck with me since.
I can recall that in my late teens through early twenties, we all tended to claim zero on our W4s. We, in effect, used the IRS accounts as a sort of savings account we'd deposit into throughout the year and then close at the beginning of the next. We'd party on it, make large purchases, take "tax refund vacations", etc. And in short order it was gone.
I was taught to do this by my parents. When I was a kid, we'd always look forward to tax refund season for similar reasons.
This is a sign of where I came from, the class I was born into, and the sorts of lessons I learned. And I like to think I'm progressing beyond such lower middle class/lower class thinking and behavior.
Why would a person, again and again, sabotage their future by not either using the large tax refund to pay off bills, investing in their future, or reducing what they pay in income tax to the smallest amount possible and leveraging that extra amount throughout the year?
Now, not doing so seems inconceivable. Each year I look at how much I paid in Fed income tax and estimate how much I will likely be paying the next year. I then try to only put in that much and not overpay. If that increases my net income, then that "extra" money gets added to how much goes into a savings or 401k or elsewhere, to work for me.
10% of your net pay should be saved, invested, etc. This is very basic stuff here. If you net $2000 a paycheck, put $200 of it aside, minimum, per pay cycle, and don't touch it. If that cuts into your lifestyle, change your lifestyle.
It's about self-discipline, really. And sometimes it's about sacrifice. And it has become very clear to me in the past decade that this is part of what separates those that have from those that don't have.
Self-discipline and sacrifice... no "tax refund vacations".