Tax time - the one time every year I am happy about how little we make on our one-income student lifestyle, because it usually means a nice refund.
I did our taxes over the weekend, which was a huge relief - both to be done with them, and to know our bank account is going to be a little bit fatter soon. I never know what to do with our tax refund. It is money we earned after all, not a generous gift, so I feel guilty being too indulgent when our income often leaves us feeling a step behind financially.
There is the really responsible decision - pay off some of our student loans, and feed back into our emergency savings.
But Europe is always calling for another trip. We both have airline mileage sitting in our accounts waiting to take us to a far away country.
And the reality is that most years I just deposit the refund in our checking account and it mysteriously disappears, the way money does over a period of a few months. Immediate indulgences on a few new clothing items or dinners out usually win out to any long term planning.
This year, whatever we decided to spend our refund on, I wanted to be really intentional about it for the long term. So here is my plan:
40%: student loans
20%: emergency savings
20%: travel savings
10%: split in our peach money funds (i.e. discretionary income)
10%: Offering to our church
How do you guys decide where to spend your tax refund? Do you plan, or not?