Everyone (especially virtually every personal-finance “expert”) has an opinion about them. And most of them are wrong.
I explained why this is nonsense in a blog post last year:
The average tax refund is about $3,000.
How much interest are you losing if you get a tax refund? $2.50 per month. Yes, you read that right. Two dollars and fifty cents a month. I have that much money in my shoe right now.
What’s more, if you’d had that money, you almost certainly would have spent it.
On the other hand, if you get a tax refund, Americans are more likely to pay off debt and save it.
This is a perfect example of “experts” missing the forest for the trees.
This is why I say that personal finance is more about psychology than minutiae or percentage points.
Read the full blog post here.
Long-time IWT readers will notice the difference between people who argue what we “should” do…versus what we actually do.
Question for you:
- How big will your tax refund be?
- What will you do with it? (Be specific.)
Leave your answers in the comments.
P.S. I’m giving away $1,001 as an experiment, which might change the way you spend your tax refund. Click here to enter to get $1,001 free.