It’s that magical time of year again. And yet again, I did not take the advice of personal finance experts who say to adjust your tax withholdings in order to not get a refund.
Don’t misunderstand me, they are right. You should adjust your withholdings, because it’s better to have your own money month-to-month instead of getting it in a lump sum once a year that suddenly feels like “extra” money, when it’s not. You EARNED that. So speaking to someone in the finance office in your job is an awesome step to take.
I personally meant to this year, but I didn’t, and here’s why:
I felt particularly unmotivated once I learned how my stipends worked. As you guys know, I worked/am working 3 stipend positions at my school this year: newspaper adviser, JV Field Hockey coach, and Co-Ed Volleyball coach. I learned that the tax withholdings for stipend positions cannot be adjusted, so I’m always going to have a refund.
Given this information, I wasn’t motivated to got through the process with my regular position. This is kind of silly, but it’s true. So that’s still something I need to check off of my to-do this, though it isn’t a huge priority.
Instead, what I’ll be doing is using the majority of the money for savings & investment goals. If you got a refund this year, I suggest you do the same. As a general rule of thumb, I say save/invest/pay off debt with 90% of what you receive, and use 10% to spend on yourself.
So, all that being said, my total state & federal refund for 2019 is: $2,590. Here’s how I’m using it:
$1,000 – Start my summer fund (the rest will be covered by my volleyball & newspaper stipends)
$610 – Finish my Emergency fund!
$350 – Add to my Roth IRA
$350 – Add to my Car Fund
$200 – Add to my Travel Fund
$80 – Discretionary Spending
I’m so excited that this refund means securing my summer, completing my Emergency Fund, and boosting my investments, Car Fund, and Travel. Finishing off my EF also means that I’ve freed up $200 every month to save towards my other goals, which is what I’ve really been looking forward to.
See you guys next week!