What to do with my tax refund?
I received a good chunk back as a tax refund. I don't really need it to cover any immediate expenses but I'm at a loss for what to do with it. Not because I don't have categories to put it towards but mainly because it's a good sized amount and I'm feeling a bit of anxiety about just budgetting it away.
I know I'm being weird and overthinking it. I went in and started allocating some of it to my Winter is Coming Expenses. Then, I felt like it was just gone and I didn't do anything fun with it.
I'm also wondering if I should just pay off a chunck of my student loans. I only have about $5,700 left. Then I think why should I pay them early?!
The other thing is I work on 100% commission so my income is highly variable. I'm thinking it may be better to just save it to cover future living expenses.
IDK. For now it's just all sitting in holding category. I know that it's technically been assigned a job but that job is just wait and see for now which is just kind of silly.
What have you guys done with your refunds?
There are many ways the money could help you. Maybe take something off the top and go celebrate, maybe a certain percentage. You just received a chunk of money and want to use it the best way, to help you the most. That is something to celebrate, in my book. Then, take your time. Decide how it could best be used to help you in the future. Variable income is something to consider. Maybe put some into a category for low income months? If it doesn't make any sense to pay your student loans, don't. Do you want to make a big difference in one category? Which one? Do you want to pad all categories, or maybe some, just to add a little buffer? Which would make you feel happier? It's all up to you. What do you want most?
That is what YNAB is all about, choosing what is most important to you. What are your priorities?
It looks like you will make a good choice. It looks like you are considering the options and will choose the one that makes you the happiest. Please don't wait long enough that it just disappears. Make a choice. It feels good. Good luck with your choice/s.
What will have the most positive impact on your budget going forward? Will paying off you student loan get rid of a regular payment that was burdensome? Do you have true expenses that are not as funded as they should be to have an even, predictable budget (eg, a 6-month car insurance due in 2 months should have 4/6 of the premium this month)? Do you have "fun" things you have been denying yourself or your family for too long? Do you need to have more saved to smooth out your variable income? Will something else make your budget easier going forward?
Hi Captain Taniele !
I know you mentioned your immediate expenses are funded, but do you have an Emergency Fund or Income Replacement category? If you can, it's best to have both your True Expenses budgeted for and Savings set aside. With variable income, having those extra funds for a slower month can be a life saver. :)
Thanks everyone! I'm thinking I should work on funding my true expenses and add more to my future living expenses budget to cover the low months. That's the wisest course anyway.
I've also decided I needed to be more active so I'm going to throw a couple hundred bucks towards a new category for activities outside the house.
Plus I have a trip to Bhutan later this year. My company will pay for me but I want to bring my partner along. I was hoping to use miles for his flights but I'm not sure I'll have enough. I'll throw some into the vacation funds just in case.
...and just like that, it's gone 😒
I know technically our budgets are savings. Some more short term than others. I guess I just miss seeing a big chunk sitting in my savings account that I knew I could use for whatever I want.
Of course that's how I got in trouble in the first place. I'd have $40k saved at the beginning of the year and it was gone by the end and I'd have no freaking clue where it went. SMH
I'm sticking to the plan though. It'll be good to see where I am at the end of this year.
Might be more boring options, but this year I used the tax refund to:
Pay my trash bill for 1 yr (saving of like $85 over paying monthly).
Fund my categories into the next month (another option mentioned is funding a single category called future income or something similar).
Hired a contractor to do a home repair.
I do try to keep the return minimal as mentioned in the other posts.
To be honest, I sat on an inheritance for over a year because I didn't know how best to use it so your paralysis is fairly normal, I think. Or maybe you and I are both weird ; )
I'm only 8 weeks into YNAB. We used our small refund to add to fund some sinking funds since we have no debt outside of car loan and mortgage. It's also helped me get a little bit closer to being buffered. I'm no where near but it's better.