How I’m Saving Today: Tax Return

how i'm saving today, Uncategorized / Wednesday, April 11th, 2012

Well now, hello again. I have been busy with the rest of my life and blogging has had to be put on the back burner, but I promise I’ll get back on the horse soon!

What’s been happening the past few weeks?

1) I went on a family vacation up to Deep Creek Lake for a long weekend two weeks ago with my folks, sister, and soon-to-be-brother-in-law. We drove up on a Friday and arrived just in time to make dinner. I start puttering around in the kitchen with my sister then heard the front door open and my husband walked in! Yay! My family and hubbie colluded to fly him up to surprise me for the weekend! Oh what a gift to see him since it had been a month already 🙂 We had a lovely weekend which included working on a take home midterm exam (school never stops!), relaxing, walking the dogs, and skeet shooting.

2) My hubbie is on spring break this week and is home (yay!) for a week so we’ve been busy hanging out and making the rounds visiting family and friends while he’s here.

3) I had a second draft of my thesis paper due this week which I had to crank out despite the fact that I would much rather be hanging out on the couch watching a movie. Grad school burnout is a real thing….

4) We got our tax return back and hooray for education tax credits! It really helps to beef up our return that we are both students. So what did we do with the money? Well, this is a personal finance blog after all. Check out my breakdown below. Also, I realized that my witholdings from work were not correct and hadn’t been changed properly after we got married last year so we had a larger return. Technically, we lost money by having the witholding incorrect and could have invested that money throughout the year rather than letting Uncle Sam hold onto it, but with our financial situation now I was greatful to get a lump sum which we really needed to pay some bills. Besides, I probably wouldn’t have invested it anyway, unless you count Cadbury Eggs an investment. mmmmm……

So here’s what our tax return went to. Some of this we had to float and borrow against next month’s
money. I always budget a month in advance so we have some float exactly for this purpose. I don’t like borrowing against next month’s money just in case something goes wrong and we don’t get the money we were expecting, but in this case we had to make some exceptions and float anyway.

-$310.20 Hubbie’s plane ticket to come home for spring break
-$159.50 Paying for FedEx shipments to ship down to Louisiana my hubbie’s suit and shoes for his great Aunt’s funeral. She was a lovely lady and will be missed. *sniff*
-$671.66 Shortfall on my hubbie’s tuition to complete the next two payments
-$550.00 Maryland Taxes (yep, we owed because unemployment didn’t take out taxes)
-$100.00 Payment for 2011 tax year to our Individual Retirement Account (IRA). Saving early for retirement means a greater return!
-$80.68 Shortfall on the bridesmaid dress for my sister’s wedding (I almost had saved enough)
-$59.31 Doctor’s bill
-$20.00 Parking Ticket (argh!)
-$105.00 Skeet Shooting at Deep Creek Lake (expensive but totally fun vacation splurge)
-$52.00 Airport parking fee
-$40.00 Haircut for me (ugh, I tried to get a free haircut but got rescheduled 3 times, so I broke down and paid. But on the upside my hair looks great now!)
-$100.00 Spending money for food and activities for my sister’s upcoming bachelorette weekend trip to Florida
-$200.00 Shortfall for my hubbie’s monthly expenses for the next two months (the man’s gotta eat)
-$100.00 Shortfalll for my monthly expenses for this month…yep, over budget 🙁

We will have still around $1000 remaining which we are dividing up to pay down debts and put into savings.

Yeah, it’s great to get a lump sum but I have noticed that it’s been really easy over the last couple of weeks to let down my guard and spend a bit too freely while thinking, “It’s ok. We just got this big tax return. We’ll still have plenty to put toward the credit card balance.” Yeah, we neeeded to use the tax return to help us out with tuition and pay some bills and such, but now I need to get the remainder out of my account pronto so it can’t be whittled down more by “Sure, let’s go out to dinner again” or “Oh yay, movies, and popcorn, and a soda, and….”

My approach to make sure that I spend any lump sum smartly is to make a list of what it needs to be spent on, use it for those items, pay bills and debts, and transfer the remaining to my savings account. Leaving it in the Miscellaneous line item of my budget can have disastrous consequences.

Did you get a tax return or any other lump sum of money? What did you do with it?

Leave a Reply

Your email address will not be published. Required fields are marked *