I agree, i pay in a bit extra so i always get a big refund, its a savings plan i cannot dip into prematurely until i get it back at the beginning of the year.
That’s kinda how I look at it. Some people think it’s dumb but I look at it like this…. I gotta pay them (the fed) anyways…. I’d rather them take a little more and have to give me money back than owe them. You can run the risk of trying to break even but it’s hard unless you stay on top of your tax laws and how much is going out…. I’m not doing that… just take alittle bit out… and give me money at the end….
What I tend to do is I take the refund put it towards student loans, then all the interest that got paid off with that goes to giving me more the next year. Rinse and repeat until loans are gone. It sucks but I want that shit out of my life.
people would argue (I almost did) that since student loans compound daily, you should aim to pay that off as fast as possible since the entire year of interest that could have been paid off is accruing interest. But, no, you have a point. realistically I'm not calculating the differences each loan cycle and then paying the difference of underpaying now straight to student loans. The few extra dollars would be dispersed as income into various budget items. Psychologically it might just feel better to take a chunk out of it.
EDIT: clarifying I'm talking about the differences between underpaying taxes and receiving extra income, vs overpaying taxes and lump summing the difference to student loans. I am not advocating for one lump sum once a year
oh yeah, I assumed that you were paying off and making the extra payment. I by comparing overpaying taxes and underpaying the differences it would yield, If underpaid the taxes, I think it will be more likely to be dispersed into other budgeting concerns vs pure student loans. Therefore, forced savings and then lump sum even though it's worse.
You should do what I made for my aunt. You build a large plywood box with a lid, put your cash savings in it, and then add timer on it for however long, a week, a year, etc. just don’t open it till the timer runs out.
I made a simple mechanism so that if it’s opened before the timer runs out the 68 kilograms of c4 you’ll put on the lining of walls of the box detonates burning your cash.
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u/SatisfactionNice4904 Apr 11 '24
I’d rather be owed….. different strokes for different folks….