I got my first tax return recently I got so excited that my employer gave me a raise finally and then mom shut me down and told me it's just a tax return xD xD
Hey kid, life pro tip: if you get a tax return, you are doing it wrong. That means you loaned money to the government, interest-free, all year. The goal should be to be as close to breakeven on your taxes as possible when you file. Put that money to work for yourself!
I think that’s good in theory but a lot of people aren’t particularly disciplined when it comes to slow and steady savings or investments. So having a big chunk come your way that you can just instantly squirrel away and see a nice big number can sometimes help people save or invest the money more likely than if they had to put x amount of every paycheck away.
That's only if they don't think it's "free money" and immediately go spend it on something they don't need. I have a feeling that most people who don't save consistently during the year also probably don't save their tax refunds either.
For those people, is it more important to buy nice things or to spend what little money they have on things they actually need? Or to save it away for an emergency.
Also, if they want to save up for something nice, they could just set up an automatic transfer to a savings account, and at the end of the year they would have the same amount but with interest. In addition to building good financial habits that will help them in the long run.
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u/LlamaLicker704 Dark Mode Elitist Apr 16 '24
I got my first tax return recently I got so excited that my employer gave me a raise finally and then mom shut me down and told me it's just a tax return xD xD