Ooooooh!  I love this time of year!  Tax time always meant money back for me and I always looked forward to getting my refund.  It has been several years since I have held a job outside the home so I don’t get refunds anymore.  I always got refunds in the thousands, which most financial advisers will say is a HORRIBLE thing!

Most financial advisers will say that if you are getting thousands back at tax time then you need to adjust your withholding forms.  They think that the best plan is to come as close to a zero on your tax forms as possible.  You should not owe nor should you be owed money.  That is THEIR ideal situation.  Their hypothesis is that it would be better for me to get a little extra money in my paycheck each week instead of a big tax refund.  The thinking goes that I would be able to invest it or save it and earn interest on it during the year instead of letting the IRS hold it.

As a single mom of four children, my life is a different story.  If there were a little extra in my paycheck each week, chances are good that it would not be going into a savings account but more likely spent as it came in.  I always looked at taxes as a sort of forced savings.  Knowing I would get a refund worth several thousand dollars each year gave me something to look forward to.  A lump sum like that feels totally different than a little bit each week!

I would take my tax refund and do some necessary things (new tires on the car, catch up on a bill or two, etc) then spend a little on some fun stuff (a new toy for each of the kids or money for a new tv, something like that) and then the rest went into savings for emergencies during the year.  That plan always worked well for me and I never regretted doing my money that way, no matter what the “professionals” said I should do about MY taxes.

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