Your Tax Refund: What This Money Writer Says to Do with It
Some of us take an interest in personal finance when we start pulling a real paycheck. Some of us become interested when we run into debt problems or set our sights on a big goal like saving for a house. Kristin Wong was drawn to money matters as a teenager, and read books on the topic while in high school.
“Growing up, I experienced my family going from being pretty broke to middle class,” she says. “I saw how financial change can impact your life, the power your finances can have over your life.”
Now Wong has her own personal finance book, Get Money: Live the Life You Want, Not Just the Life You Can Afford, which came out just last month, and regularly writes for such publications as the New York Times and Glamour. Just in time for Tax Day, we asked her for three smart things to do with a tax refund.
#1. Pay down any debt.
“This should be a set rule: any windfall goes toward your debt. If you have a plan to get out of debt by a certain day, this will get you out faster. Also, if your refund is more than $500, I would recommend adjusting how much is being withheld from your paycheck. That’s money you could throw at your debt throughout the year.”
#2. Kick-start a financial goal.
“We often don’t start a goal, whether it’s saving for an emergency fund, a vacation or a down payment on a home, because we don’t think we have enough to begin. Now you do!”
#3. Spend a small part of it on fun.
“Allow yourself to enjoy 25 percent or less of the total, so you don’t feel deprived. It’s important to set a limit though, so you don’t get crazy and spend it all.”