How many here will use their income tax refund to get out of debt or get their food storage?

[Babbi-Dan]

We had a refund and decided the best thing we could do was to use it to help get us out of debt. When we figured the monthly interest payment we would be saving, it was a no-brainer! I was just wondering if anyone else here was like minded.

[hiccups]

We have done both of those things in the past with refund money. I am thinking that most of it this year will go towards savings. I might make a trip out to the cannery for a few items I'm realizing I want more of, though. Our mortgage is our only debt and we pay some extra each month.

[cHeroKee]

I am happy to say that we are completely out of debt, including med school expenses.
We have fixed our W-4's to basically break even on fed and state returns. We take the money that would go to Uncle Sam during the year and invest it to get interest. Uncle Sam does not give out interest but loves to charge interest and penalties at any minor discrepancy.

[hiccups]

Yeah, we're whittling down our withholding as well. Should be a much smaller refund than in past years.

[Baconator]

I'm paying off one of our vehicles.

[signseeker]

We might get a new septic system for the cabin... or pay down the cabin. That's our only debt. After living debt-free for a decade, it gets a little old.

Just kidding!! :w00t:

[Cowboy]

Seems like I pay taxes every year...:beatdeadhorse5:

[signseeker]

Seems like I pay taxes every year...:beatdeadhorse5:

My FIL did that all the time, on purpose. You've got to be kidding if he was going to go a whole year without the interest on that money while the IRS got interest off of it instead. It's actually the smart thing to do, when you think about it.

[mirkwood]

Most of ours will go into savings. Although...our car is nearly paid off...maybe we will do that instead.

[Noahs ARK]

We don't get a refund. :o11:

[sunsinger]

Seems like I pay taxes every year...:beatdeadhorse5:

If everyone received all of there money and had to cut a check to the IRS we would not have the current tax laws. The public would have put a stop to it long ago.

[signseeker]

Most of ours will go into savings. Although...our car is nearly paid off...maybe we will do that instead.

Are you paying more in interest on the car or would you make more interest in the bank? Pretty easy decision, really.

[mirkwood]

Interest rate is low...I don't remember what. I'm thinking more along the lines of only having the house payment debt.

[Earthling]

Interest rates are terribly low -much lower than the interest you are paying. Not to mention peace of mind in paying off debt.

[Aldon]

I just hope I do not end up owing this year....

[waif69]

We take our federal return and hand it over to the state for payment of taxes due, they usually match within a $100.

[KF7EEC]

I've been self employed for a long time. 2009 is the first year that I've gotten a W2. I had my depends low as i didn't pay any quarterly taxes and didn't want to have money due in April. So, it looks like I'll get a couple of thousand back. I haven't decided for sure what I'll do with it. Maybe build up some savings. I'll probally get some ceiling fans installed. My parents & I own a rental house together. Maybe I'll pay down on the mortgage (they'll match what i do). Lots of choices....

[signseeker]

Technically you're not really building up savings when you're still in debt.

Or am I missing something? :blink:

[LoudmouthMormon]

We have zero debt, at least to other people. Sometimes, we'll borrow from our savings account, and pay ourselves back over time. We call these "holes in the budget". For stuff like tax refunds and bonuses and whatnot we usually skim 10-20% off the top for stuff we want (vs. need), and we use the rest to fill holes.

[Highlandsunrise]

We try to make it come out even but this year we took out quite a bit of pre-tax money and are going to owe big time. Ouch. We have no debt and the food storage is in pretty good shape. We haven't done a good inventory in a few years--we need to do that to pick up the gaps.

[KF7EEC]

Technically you're not really building up savings when you're still in debt.

Or am I missing something? :blink:

The only debt that I have is mortgages on 3 properties. One of these houses I owe with my parents and my tax refund could pay about half of my half (my parents will most likely match). Or I could pay off almost all of the 2nd mortgage on one I own by myself. Or I could use it to build up an emergency fund / rainy day fund, which would be nice if either of the tenants moves out and we have a hard time re-renting it.


BTW - I just (in the last 30-days or so) paid off my last non-mortgage debt! :)

[Noahs ARK]

BTW - I just (in the last 30-days or so) paid off my last non-mortgage debt! :)

Congratulations!

We have a ton of credit card debt from when my huband first became disabled. While we were waiting for his long-term disability insurance and social security disability to kick in, we basically had to live off our credit cards. We had NO credit card debt when he had his surgery, so this just kills us.

My plan is to pay off my Pathfinder first. Even tho the interest rate is way lower than the credit cards, at least I'll own it and it can never be repo'd - that gives me a great sense of relief.

[KF7EEC]

I do have 5-mortgages on 3-houses... so... ummm. Still a lot of debt. But 1 house *should* be paid off late this year or early next year and the 2nd on another house by mid-next year.

[mirkwood]

I had my depends low




So you wear diapers :blink: and "low ride" them? :biggrin5:

[hiccups]

So you wear diapers :blink: and "low ride" them? :biggrin5:
Makes me think of an of old retired plumber who scandalizes the retirement home.

[signseeker]

Ha! My roommate and I had this little pic of a plumber butt from a magazine and we'd "hide" it around the apt. to remind ourselves to not be a butt. It would show up as you lifted up the toilet seat, or on the milk in the fridge or on the phone's numbers.... :l0 (44):

[Buffie]

We have no debt--no mortgage, car notes, nothing. We buy most of our clothes at thrift stores, books/CDs/DVDs from used places, and I don't use much processed food. I'm seriously thinking about liquidating all my IRAs and putting the money in a federally insured bank. It doesn't pay any interest, but I think it's protected. I believe the stock market is going to crash again. Time to deepen the moat.

[Roper]

We had to use a lot of our emergency fund to replace some plumbing that froze when we had record low temps last month (where's that "global warming" when you really need it?) We'll be using almost all of our refund to rebuild our emergency fund.

[LEVE]

Mine's going for a large Pellet Stove and 3 tons of wood pellets.

[Roper]

Buffie, I'd recommend consulting with an investment professional before you make any big decisions about your retirement accounts. If you just "liquidate" them, you're setting yourself up for some big tax penalties. Check out your other options. If, in the end, you do decide to go ahead, don't just stick the money in a bank account. It will lose value due to inflation outpacing the ridiculously low interest rates. At least consider TIPS (treasury inflation-protected securities.) They're like bonds, but they're guaranteed to keep pace with inflation as defined by the consumer price index. You won't make much, only the amount of the coupon, but at least your money won't be losing value.

[BackBlast]

Buffie, I'd recommend consulting with an investment professional before you make any big decisions about your retirement accounts. If you just "liquidate" them, you're setting yourself up for some big tax penalties. Check out your other options. If, in the end, you do decide to go ahead, don't just stick the money in a bank account. It will lose value due to inflation outpacing the ridiculously low interest rates. At least consider TIPS (treasury inflation-protected securities.) They're like bonds, but they're guaranteed to keep pace with inflation as defined by the consumer price index. You won't make much, only the amount of the coupon, but at least your money won't be losing value.

There's talk about in government circles about going after 401ks - they know they are almost out of money. I think it's a good idea for people to gain "control" of as much of their money as possible, which means removing it from restricted accounts like IRAs and 401ks. However, you have to balance that control, etc, with the penalties you're willing to accept. I didn't used to maintain a 401k, I do now solely as unemployment insurance/savings. But the weasels eying the 401ks are making me nervous with even that.

We have not been inflating recently - quite the opposite. I think cash is a good place to be, if you want to hedge inflation or dollar devaluation, the best way is to have some money in instruments linked to oil, then maybe followed by precious metals. It's hard to store oil at home though... Financial instruments can be risky due to counter party risk.

[Roper]

I agree that having cash and precious metals is a good idea, as long as it's part of a diversified portfolio. I'm not comfortable with the level of risk inherent with the majority of my investments in just a couple of areas. If this administration starts attacking my retirement assets, however, I'm seriously considering moving that money into real estate. I have some experience there, and there are still a lot of bargain properties.

[phylm]

Yeah. What's an income tax refund? )o: