by Tom Geoffroy

Created on: April 16, 2009

Where do April showers come from? Could it be from all the tears shed because it is tax season? Many shed tears as they mail tax payments to Uncle Sam for taxes owed. Millions of others shed tears of joy because they are getting an income tax refund and are excited about spending it as soon as it comes in the mail. Will you get one of those refund checks? How will you spend it? Will you spend it at all, or save it?

Before you do anything with your refund check, take it out of the envelope and look at it closely. Really; look at it and ask yourself this question. "Why am I getting this check in the mail from the U.S. Treasury? If you don't know the answer you need to find out. The answer is; you are getting that check because it is your money. It belongs to you. It always was your money. You are getting a refund because the government took too much of your money during the previous year. How does that make you feel? They took too much money from you. How do you feel when anyone takes more of your money than they deserve? If you are overcharged at a restaurant do you wait a year to get your "refund"? No, you want it right away and you expect them to apologize to you for overcharging you. Unfortunately too many people think the refund check is a gift from the government and they spend it as if it were found money.

The average tax refund in 2008 was $2,429. That is just a little over $200 per month. What could you do with $200 per month? Consider that when you are deciding how you will spend your refund. When you have that perspective you may just spend your money wisely.

If you have a car payment you might want to spend it on your car loan to reduce your interest and have the car paid off sooner. If you own your own house you could apply it to an extra mortgage payment and see your mortgage paid down sooner and equity built up. There are probably many things you could do around the house that will add value to your home and give you a good return when you sell.

There are also many gizmos and gadgets you could buy that will soon break down or be obsolete. Hey, it's your money; if you want to spend it foolishly you can. The government spends your money in foolish ways all the time. This time you get to choose.

One interesting way to spend your tax refund is to take the money and divide it up into twelve equal parts. Put each part in an envelope and seal it. On each envelope write a month of the year so you will have all twelve months listed with equal amounts of cash in each. Put the envelopes in a safe place. At the beginning of each month, take out the corresponding envelope and celebrate. Go to dinner, a play, a long weekend at a bread and breakfast. Buy that gizmo or gadget. The idea is to be aware of the money you are spending. Realize this is your money you could have spent each month last year if only the government did not overcharge you. When you get used to having this money month after month to spend as you see fit, you will realize you can keep more of your own money each month instead of giving it, interest free, to Uncle Sam. You can adjust your withholding and increase your net pay. This way you will have more money in your pocket and still have your income tax obligation paid. You will not have that big refund check coming during the tax season, but you will have access to all your money all year long, as you should.

Our money is best spent by us. When we have control of it we tend to make good spending, investing, and giving decisions. Try this approach and see how much better your financial decisions are. You will probably be more aware of how the money the government keeps is spent and you may be motivated to sound off about it too.

Learn more about this author, Tom Geoffroy.
Click here to send this author comments or questions.