The lost art of saving money or Why do you have to buy so damn much??

[Seshat]

Wait....how can someone blow $5k within a week that isn't bills and the like?

I'm sure this is probably in your 'bills and the like', but things like roof repair, restumping the house, getting plumbing fixed or upgraded....

Well, that's how I would, anyway.

I'm one of the foolish people that prefers to get a largish refund. I know that the government is using my money for free, but if it were in my pocket during the year, I'd likely just spend it. By getting a chunk all at once, it's easier for me to drop it into my IRA and take the deduction next year. Small amounts are a lot harder for me to hang onto than a big chunk for some reason.

Banks provide a service where they can take a small amount out of your account every payday, and stow it in a different account for you. Then every year, you get that saved money, plus interest, to do as you wish with.
Usually they're called 'Christmas club' accounts, but I'd recommend getting the bank to make the release-to-you date some time other than Christmas or the summer holidays. A time when you'd be inclined to spend the saved money sensibly.

[taxguykarl]

People always seem to like to burn through all their money and then complain they're broke. You'd think they'd figure it out.

Nothing I don't see--buying the latest electronic geegaw or a new wardrobe with their refund--even though their income is less than $20K. At the risk of getting this post shipped off to Fratching, most 'poor' people don't lack funds, they lack priorities.

Some people never could figure out how much to have taken out, and would get a huge refund. Then have no reason (or be so high that they forget) to show up to work until they ran out of money.

It's not always just the withholding, often it's the earned income tax credit which gets more generous every year. Also, I get several replies along the lines of: "REALLY. That's deductible?!" every year With regard to withholding, paranoia about the IRS is not rare--I deal with them and I wouldn't dream of taking them lightly.

Yep, I've seen people blow an icome tax refund cause it's "extra" money, even when they were being threatened with having electricity shut off for non-payment. And of course, they use tax preparers that give them their refund immediately, rather than waiting for the IRS (for a fee, of course). My sister always did that. Of course, she also would take a newly received paper check refund or other windfall to a check cashing place on a Saturday evening and pay as much as 20% to cash it, rather than wait and deposit it in her credit union on Monday

Nothing out of the ordinary here--currency exchanges leave coupons in our waiting area, never mind that the refunds come to us as cashiers checks which clear instantly at banks or that our local Wally World will cash them for $3.

Here's an extremely stupid question. How on earth do I figure out if I even GET a refund at all?

Do like quite a few other CSers: PM me your info and I'll give you the best guess I can without actually doing your return.

I have one more document to go before I can file taxes. I'm due to get a first time home buyer's credit this year though and I've already spent it in my mind towards home improvement and landscaping in the spring.

Keep in mind that you have to snail mail your return. Electronic filing for that credit is not allowed. The form for the home buyer's credit calls for documentation--your closing statements are the best ones. Also go through it with a fine-tooth comb as some of those nickel-and-dime fees are points and are not always reported on a 1098.

I finally got my own return completed and transmitted. Mrs. TGK and I have itemized since we took the plunge (we bought a house in the same year), before that the standard deduction gave us the best deal.

As for spending $4K or more at one sitting, that's easy--pay off (not down) debts and other bills and/or (as Mrs. TGK is doing this year) spring for a Panama Canal cruise--she's already counting down the days.

[Midnight_Angel]

Ah, the old "cashtration" syndrome - it looks like you're getting free money when in fact, you've overpaid the government and they're returning the extra. With no interest. Woo hoo!

Cashtration syndrome? I thought you could describe the spending frenzy as a matter of intaxication...

As for the tendency to spend the money I get back (yeah, filing for tax refund is just as fun over here in Germany; I tend to spend some 20 hours every year on whipping up my Einkommensteuererklärung)... guilty as charged. However, I only blow money I think I can afford to blow... should I have open bills, or debts, or some major spendings heading my way, these take priority...

[DGoddessChardonnay]

Yeah, we're weirdos that use tax return money to do dumb stuff like pay off car loans and credit cards so that we eventually end up with more expendable cash every month. But we're crazy like that.

People always seem to like to burn through all their money and then complain they're broke. You'd think they'd figure it out.

Not if their brains are too fried from drugs and/or booze to notice . . .which sounds like some neighbors we have around the corner from us.

Mine went toward having the car fixed (we'll pick it up this coming Wednesday), so we'll have something substantial to show for it - no more reminders of Bambi.

[lineswine]

I've blown the equivalent of $10k in one go TWICE & $45k ONCE.
Once was in 2001, the deposit on the house we now live in & the other was in 2005, I bought a SAAB 93 - 5 years old, for cash.
The SAAB has gone to the great scrapyard in the sky, an unfortunate incident at the top of the M606 seeing to that.
As for the $45k? That was also in 2005, it was the final payment on our house - otherwise the mortgage payments would have stretched until 2013.
Given how many times I've been too ill to work since 2005, I'm bloody glad things worked out as they did. We took out "mortgage payment protection" insurance, but you can bet your arse they'd find some loophole to wriggle their way out of paying.

[ShadowBall]

My employer who I've been with for about four years doesn't take taxes out of what I earn, so when everyone else is getting a few hundred or thousand bucks back around income tax return time, I have to cough up $300+. I was told this year, I may be able to claim interest I paid last year on my student debts.

Even if I do get anything back, it won't be something I can even put into my savings. It has to go toward more college that I don't even want to be taking part in (but hey, everyone knows what's best for me more than I do, so there goes a possible $3000 that I could have put toward a car).

[Mytical]

I still am pondering what to do with my tax refund, which was a bit larger then I anticipated. Normally I get back $0 (or very close to it, a range of -100 to 100) if that, as I worked out how much to have kept out so as to not owe most of the time. While not letting Uncle Sam keep my money to go gambling and boozing .

However, thanks to "Making work pay" and the college reimbursement I got a bit back. At first I was going to do the PS3/game thing. But I got a PSP and after beating FFVII (Again for like the 30th time)..it sits collecting dust. Most of what I did spend went to presents for birthdays for my sister, mother, and father.

I am considering paying on my house..because even $100 to principle would net $300 including the interest saved. Not many places you can get double your money back 'instantly' (technically it is over 30 years, but meh). Also my car..which thanks to bad credit has a bit of a high interest rate. Still pondering that.

Also, visiting a certain special somebody would be good . For some reason I get scroogish when it comes to things for ME however. *shrugs*

Despite all of that, I will still have a good padding on my bank account. Even if I go visiting

[Seshat]

As for the $45k? That was also in 2005, it was the final payment on our house - otherwise the mortgage payments would have stretched until 2013.

Mega Congratulations.

I think that's a perfectly good way to spend $45K in one day! If I get some sort of massive cash windfall about now, I'll spend $160K in one day. (yes - same thing. Buying out the mortgage on the house.)

[protege]

I think that's a perfectly good way to spend $45K in one day! If I get some sort of massive cash windfall about now, I'll spend $160K in one day. (yes - same thing. Buying out the mortgage on the house.)

That's what I did when I bought my place. Instead of putting the (then) required 10% down, I did some careful thinking...and found a way to put about 40% down. Granted, I don't have the same amount of money saved now, but it brought the total amount of my mortgage down. I still have a 30-year mortgage, but if I got some massive amount of cash now, I'd take the $50k, and pay off the house. Then I could start saving most of my money again...and I'd be able to invest more towards my retirement.

I've already been attempting to pay off the car for similar reasons. I've doubled-up on payments the last 2 months. Not only will I be paying off the car sooner, but the 'extra' amount goes towards the *principal* on the loan. When I bought the Corolla back in 2007, I found an interesting way to get it. That is, I withdrew the cash I'd invested in a CD, and then financed the rest of the car. We're only talking about $5k here, folks. Meaning, that my monthly payment...is something like $130 Still, I'd like to eventually pay it off, and put that $130 towards better uses--like home repairs, things for the MG, etc.

I hope nobody thinks I'm bragging. The only reason I was able to do what I did...is that I didn't have any bills for a long, long time. I was living with my parents until I turned 30, and was saving most of what I made for the house. The car I had then was paid for, and soon after I graduated college...I started paying off my student loans.

That's not to say that I don't have a little fun from time to time. I still go on vacation with my parents, my hobbies, etc. but all of that is carefully kept track of. I don't pinch pennies, but I'm not a cheapskate either. For example, I only bought my laptop because of the deal I got--2 years, no interest, and no payments. Sounds great, but I'm still making payments on it..but not having to pay interest. I'm no fool

[HappyFun Ball]

I know a lot of people like getting a big lump sum at one time as opposed to getting a little bit more every paycheck, they lack the ability to save money the old fashioned way.

I'm getting a total of 3800$ back this year, 2400$ on federal and 1400$ on state.. I'm going to keep the state part in the bank and I've already got the federal spent, I'm going to catch up on a few bills and buy some new clothes.