Be honest...how many of you use your tax refund to book or pay for a cruise???

[Nliedel]

This is a HUGE forum. There are more posters here than most other forums on the internet (I got that from somewhere last year that tracks stats on the internet. Someone will post the link I am sure). Once you put it out there you will be amazed at all the directions a thread will go in! I love that about this board!

[DMickey28]

I need to redo our taxes this year. I can't figure out what went wrong. DH and I both claim 0. Doesn't that allow the government to take out as much as they want, basically??? We made 12K more this year than last year and last year we got back over $3K, this year someone messed up (his company we think) and we owe $3K. Does this sound right? We didn't change ANYTHING with our W-4. Unfortunately we don't own a house yet and don't have any deductions other than student loan interest... I don't get it.

[Jan_In_Maine]

DMicky - you really need to talk with your tax professional - There are all sorts of reasons why tax liabilities go up - change in tax brackets, etc. etc.

[cruisinMike]

Okay you guys. I'm a financial consultant and have to remind you that this isn't free money Uncle Sam is giving you. It's money you "lent" to him during the year, tax free, that he is now paying back because........you had too much withheld from your paycheck. Wouldn't you be better off getting that money in your paycheck, investing it - even if only for 4% in a money fund? or - using it monthly to pay off debt. I know, I know. I hear it all the time..........if I don't have it, I won't spend it. But the reality is, a lot of people run up credit card debt during the year because they are having too much money withheld from paychecks each month and think when they get a big refund that it's "free" money to use for treats versus paying off debt.

 

Are you going to yell at me for being a "spoiled sport"?:(

 

 

Yep, it just don't make sense to give the government your hard earned money and let them keep it for a year. If folks claimed the proper deductions and had an equal amount auto deposited (what's that you say ;) ) each paycheck that would add up to an amount equal to what they figure their annual return would have been, they wouldn't miss it and it would get some interest to be used for the same thing. Hey, and the pot will be bigger then what you would have got from that cheapscape uncle!

 

Did I hear people are actually waiting on snail mail to get a refund. Oh well, I heard just the other day that some people were using checks and a stamp to pay bills too. To each their own. ;)

[cruisinMike]

Now that's silly. You've got at least one billing cycle to pay it off without incurring interest. If you were to charge at the start of cycle, that could be close to 60 days more that you could keep accumulating savings, earn interest in your account, and still pay of the credit card on time without incurring any interest!

 

 

Now there is someone near and dear to my heart. Anytime you can use someone else's money for free, regardless of how long, take advantage of it. Anyone think that their favorite uncle sam is doing this as a favor to us. Think again.

[MrsPete]

We definitely do! We used to have to pay every April as well, until we adjusted our deductions. It was agony to save all year only to have to send our "savings" in to the government. I don't care if they keep a huge chunk of change as long as I get some of it back!

Definitely NOT my philosophy! I DO mind that they keep a huge chunk of change -- more than my share!

[Byram Anne]

:D I sure do. Every penny of the refund is going towards the cruise!

[ssatterly]

I do.. I do!!!

[Tofutti]

You're not using your equity line . . . That's exactly the point I was making . . . in my scenario, you are still using the exact same amount of money each March (just like a tax refund), but saving it yourself all year then spending all of it except the interest earned instead of having the govt save it for you with no interest. The result is that you still cruise (or do whatever you chose to do with your tax refund dollars) and have thousands extra at retirement to boot!

 

Not to mention that my example took you to age 65 . . . not 80! I know plenty of people who love to cruise well past 65!!

 

Now, don't get me wrong . . . this is all just a friendly little example using cruising. The real point here is that people don't seem to realize that what often seems to be just a pittance of interest they are giving up by continuing to receive large tax refunds can add up to thousands and often tens of thousands of dollars of lost money over a working lifetime.

 

Ok, I just calculated the interest on the refund, it's a whopping $70, so I guess in 30 years we could cruise on the interest(maybe, who knows how much they'll be in 30 years) and in 30 years I will be 73. We haven't always got a refund, just in recent years. Also, if you lived in my house, you would see that money seen is spent. The savings account isn't safe...things always come up that money has to come out of it to cover untimely expenses, only the IRA's that can't be touched are safe, so a tax refund big enough to cover a cruise will just have to continue. I also meant that if we weren't using the refund, we'd just borrow from the equity line to cover the cost. We're cruisin no matter what!:D Thanks for the advice, though I wish I had gotten it 20 years ago.

[iluvcruzin]

I pay for my cruises from a vacation account that earns interest. The idea of breaking even on taxes is a smart idea as it is so easy to put that little extra each month automatically in a savings account and earn interest.

[bosteph]

Now that's silly. You've got at least one billing cycle to pay it off without incurring interest. If you were to charge at the start of cycle, that could be close to 60 days more that you could keep accumulating savings, earn interest in your account, and still pay of the credit card on time without incurring any interest!

 

Actually, I agree that it is smart to use the entire billing cycle. I also agree that for many people it would work out great. I do it this way so that I cannot be tempted to spend the money on something else. :o This method has served me well for the last 10 years and many trips/vacations. To each their own...