I Triple Dog Dare You To Not Touch Your Tax Refund

 

That’s right…I said it!

I triple dog dare you to not touch your tax refund. 

I’m taking it back to the elementary school days. I’m that kid in A Christmas Story that goes straight from the double dog to the TRIPLE dog dare. But instead of daring you to do something crazy – like sticking your tongue to a frozen pole (oh to be young again…), I am daring you to do something positive & audacious. “Are you out of your mind?” I can hear the responses. Isn’t receiving your tax refund like a free pay day/bonus?! Not so fast…

This is why I dare you not to touch your tax refund:


 

1. What could you possibly want right now in exchange for more money in your future?

That’s right. It’s hard to tackle this, because our society is so based on buying NOW, needing this now, get this now. I understand – we are completely bombarded with tailored ads of products & items that scream “buy me.” Why do they have to know my browser history and shove it right in my face even after I’ve left the previous page…Need some more convincing & hard factual numbers? Check out Millennial Money Man’s post: Tax Refunds. You’re doing them wrong.  He’s got this down on lock, and if you need anymore convincing than what I can do – this is definitely the place to go.

2. Wait, wait – make that thousands of extra dollars for your retirement

Hot dang, this is getting good! So this is the idea that you have such a great amount of determination that you save your tax refund year after year, versus spending it. Even with a modest, estimated 5% return – those tax refunds you save now can equal big bucks in the future. Want to know exactly how much with your own determined numbers? Try out the Investor.gov Compound Interest Calculator. This should give you a great visualization & indication of what the money you receive now could be in your future!

3. You do not need the money now

I’ve got so much faith in you that you do not need to touch a dollar of that refund that’s been put into your account! Remember that study with the kids & the marshmallows…yes, delayed gratification. It’s a wonderful thing! Act as if this month is just a normal month of receiving your regular income with the idea that if you set aside your tax refund (either in savings, retirement fund, IRA, etc.) that it will be a larger sum in the future. You’ve got it in you. Here’s even a virtual high five to get you started (or fist bump, whatever you’re in to).

4. Your future self will be entirely grateful to you

And who wouldn’t want to impress their future selves? I mean, I know we all have an insane amount of goals. Think about who we are now, and where we were 5 years prior. Don’t you wish that person 5 years ago did just a little more, instead of kicking yourself in the shins in the present? Yeah…me neither (not…). Surprise your future self! I know we would all be incredibly grateful in our retirement that we had that extra money to fly and see our grandchildren, travel to exotic places we did not know existed, or satisfy that Bucket List item of visiting every craft brewery & coffee shop in the U.S. (heck yes, that is one of my Bucket List items). 

5. Your willpower will impress the masses

So…remember that one time you & some friends made a pact to do an all liquid diet and shoot, you all gave in to Sunday morning brunch of croissants, jam & mimosas (wait, that’s not a part of the liquid diet)? But wait…there’s Stacey in the corner NOT eating anything. She’s sticking to the all liquid diet, while all the rest of us faltered! She’s got some willpower & we all commend her for that (maybe there’s even a dash of jealousy too?). Or, fellas – maybe you’re all at the gym getting your work out on when all the sudden Billy over there is about to max out his bench press at 300lbs. for the day. He’s got that willpower, and now you all want to try it too. Alright, so willpower can be applicable to so many situations – so why not with money too? All of the sudden YOU are able to strictly save/invest that tax refund, while others spend it in a snap ($1,500…POOF & it’s gone)! That’s right, the masses are going to look to you & get inspired (maybe I am thinking too highly, but you’ve gotta believe you’re going to inspire a couple people). It’s kind of like those questions: “What would you do with a million dollars?” Most people would have answers such as spend, spend, or spend. But you, my friend, have that awesome answer of “I would save it (or invest it).”


 

Have I convinced you yet?

A: Yes, I can’t wait to save my tax refund!

B: Nope…

 

Okay, so if you’re answer is A: YOU are incredibly awesome & I wish I could give you a hundred high fives (not just the one I offered above). If you answered B: that’s okay! I still like you. Just take some time to at least sit & think on it. Mull it over. I’m still triple dog daring you to not touch your tax refund, though.

 

Daring you with financial challenges one post at a time…

All my best,

Alyssa.

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24 thoughts on “I Triple Dog Dare You To Not Touch Your Tax Refund

  1. Alyssa,
    Good slant on helping Millennials save now – and as you say, doing so now has in incredible impact on the savings that will be available at retirement.
    I see a post where the person is using a refund to pay loans – if the interest rate on the loan is high, I agree. If it is a low interest loan, as in the rate some obtained when consolidating student loans (as low as 2.9%), then saving for retirement is actually a better plan, especially if you can use an IRA or a Roth IRA.
    Good work!
    http://www.millennials-money.com
    https://millennialsmny.wordpress.com

    Liked by 1 person

  2. Love this! My husband and I joke that we are going to put any windfall money toward a boat, because the last thing we need is a boat. Boat might just be code for being financially responsible. This year it went toward my student loans. (Almost gone!)

    Liked by 1 person

  3. Good point! If we end up with a refund (we like to play it close, so it’s usually not very big) it goes straight to investing. Same with bonuses. We invested all but 10% because, why would we need that windfall when we’ve been living off regular paychecks before then? Like you pointed out, a lot of our colleagues are using them for new cars, pay off credit cards, pay off vacations (already taken), and more due to the “gimme, gimme, I NEED that” spending attitude. It’s a nice feeling to not “need” the tax refund or bonus. Good post!

    Liked by 1 person

    1. I love it! It is so great to hear that you also put your refunds & bonuses straight to investing. I hold the same mentality! Why need to increase your spending for just that lump sum you receive (whether refund, bonus, etc.) when you already have a great system down with the amount you make on a regular basis? Thank you for your reply! 🙂

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  4. Good point! If we end up with a refund (we like to play it close, so it’s usually not very big) it goes straight to investing. Same with bonuses. We invested all but 10% because, why would we need that windfall when we’ve been living off regular paychecks before then? Like you pointed out, a lot of our colleagues are using them for new cars, pay off credit cards, pay off vacations (already taken), and more due to the “gimme, gimme, I NEED that” spending attitude. It’s a nice feeling to not “need” the tax refund or bonus. Good post!

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    1. That is so great that whatever is leftover you invest! Exactly, when you learn to live at (or below) what you already making – why do you need that additional windfall? Such a great point! That attitude just isn’t for me. Not needing it is one of the best & most comforting feelings! (P.S. I thought I had responded to your comment back in February – now going back on my posts I realized no reply was left & I apologize! I intend to reply to each & every comment!)

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  5. I like your style Alyssa! My wife and I have actually decided to put it towards our credit card debt to increase our savings rate in the future. Yes it does take some willpower to not spend that sudden surplus of cash, more people need that king of willpower!

    Liked by 1 person

    1. Thank you!! That’s still so great, whatever is best to work on any goals (retirement, student loans, driving down debt) is wonderful! We’ve all got the willpower, and I love hearing stories from people who exercise it. Thanks for sharing!

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  6. There are some people who think a tax refund is free money so it’s spent rather than used to support their financial goals. Change in mindset is key. I go with the 40/40/20 rule. Save 40, use 40 to pay down debt and 20 to spend. The rule does something to our psyche that keeps a person motivated.

    Liked by 1 person

    1. Very true, Jason. It’s difficult when that mindset may have been facilitated while growing up and there may have been no other teachings relating to the idea that receiving an extra perk of cash (say tax refunds, bonuses, etc.) does not need to be spent in the now! Thanks for sharing your rule, I think that’s a great motivation!

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  7. Wait, people blow their tax refunds? I mean, I knew abstractly I guess, that some people do. But I figured anyone reading a PF blog would either put it toward debt or right into savings/IRA.

    We’ll be applying any surplus into savings, but currently that’s really the “crazy expensive oral surgery bill” fund. Next year, we can throw our refund into the IRA or to bulk up our emergency fund or… something productive.

    Liked by 1 person

    1. I know, it seems almost like a foreign concept right?! I could imagine most people that dedicate time to PF blogs would do so, but just in case there were any readers out there who may be on the fence as to what to do with their refund. 🙂
      That’s still great though! I like the responsibility of taking that bill head on to pay it off. We all encounter certain occurrences like that! It would be great to hear what you do next year as well!

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  8. Great thoughts! Glad you’re encouraging this kind of patience and discipline. My wife and I invest our tax savings or return when we get any. Wish I did more of that in my 20s, but hey 30s isn’t too late, right? Keep up your writing!

    Liked by 1 person

    1. Adam,

      That is so great to hear! Its amazing what those refunds can grow to when you invest them. It’s never too late, as long as you start is what’s important! Thank you for stopping by!

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