Why Are You Loaning the Irs Money

2 March, 2014

Tax time! For some, it is a very dreaded time of year, while others look forward to a big pay day. I have had several talks recently with couples expecting a big tax return and want advice on how to put it to good use. I am always happy to give advice and put some options together for how that money would work the best for them. However, once that is decided, I always ask why they are lending the IRS money? Of course, I always get a very confused look.
Let’s put some numbers to it. In these conversations, a $2,000-3,000 tax return is not uncommon. For simple math purposes, let’s just say you are expecting a return ok $2,400. That comes out to $200 per month that you are lending to the IRS. They in turn invest it and make the interest off of YOUR money. I am quite sure that if the shoe was on the other foot, the IRS would be contacting you frequently to ask for there money and the interest and fees involved.
You may look forward to your return each year, but most of the time, this return is spent on “things” which you don’t have money for throughout the year. What if you were to have an extra $200 per month to spend. What if you could get %18 interest on that money throughout the year? Now before you email saying there is no way you can get 18% interest on your money, let’s take a look inside your wallet. How many credit cards reside there? How many are you currently struggling to pay? The average interest rate for a credit card is 18%. Ironically, NOT paying 18% in interest, is a lot like gaining (or keeping) 18% interest.
What I am suggesting is, skip the annual tax return that gets blown on things that are out of date by next tax season. Make the change to your W2 that lets you hang on to that $200 per month. Pay off those credit cards hanging around your neck and in the long run, you will have more money to go around.

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My name is Tim Parady and I am 36 years old. I was born in Connecticut, raised in Virginia, had a brief layover in Kansas which led me to Texas where I met my wife and best friend. We just celebrated 145years of marriage.
I have the best job in the world, which is to improve peoples lives. I teach people how to win in all areas of there money, which affects all areas of their lives.
78% of Americans live paycheck to paycheck, with no money in the bank and little knowledge of how to invest for their retirement. You can have a different future. You can win with money and I can show you how.
I am an independent Dave Ramsey Financial Coach,and Insurance Agent at Alkali Insurance and I am here to serve you. My goal is to provide knowledge and tools to change your life. To schedule an appointment to address your financial needs and goals, email me at tim_parady@yahoo.com

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