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In our home, "New Years" doesn't mean parties, staying up late, or watching the Dick Clark special. "New Years" meaning figuring out our tax refund. While this may not be the highlight of some people's year, it is for my husband. He lives for this one time of year when we get a large lump sum of money that doesn't "have to" be spent on the normal things in life like groceries, the internet bill, cell phone, electricity, etc.

With that being said my husband plans all year (yes, all year) for what he will do when we get our tax return. Even though today is just the beginning of March 2007, we have received and allocated our tax refund, and my husband already has plans for the refund we'll be getting one year from now.

You might think my husband is a little anal, and yes, that is true, but he thinks of himself as being wise with his money. And I don't mind (sometimes) how detailed he is, just as long as we have the money we need. We aren't a family that has a lot of debt, and we aren't a family that has a lot of money lying around with no place to put it. We have a house payment (only 29 more years to go!) a car payment (which will be paid off in 2008, thanks to that year's tax return), and some small credit card bills hear and there. Mostly we use credit cards to buy something large that we can pay for in 3 months time.

We choose to spend our tax return three ways:

1. We pay off some debt: One year we paid the balance off on my car. Another year we paid for the computer we'd purchased 2 months prior. While we don't always pay off an entire balance, making a large dent in debt is a major sense of satisfaction.
2. We plan for the future: Either we put a large portion into savings or into investments like the stock market. (And boy, I sure was glad my husband stockpiled into savings when we became unemployed for almost 4 months. That savings became our lifesaver!)
3. We spend money for ourselves: Normally this means a large shopping spree at outlet mall located just 20 miles away from us. We make the trip with our three children and all buy lots of clothes, enjoy a leisurely lunch at a restaurant, and then come home tired and satisfied.

No matter how large or small your income tax refund may be, I think everyone can allocate their money as listed above.

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