Tax Season is Here: Embracing the Unexpected Benefits of a Big Refund
As we dive into tax season, I’m reminded that many people have already filed their returns, while others, like myself, are just getting started. As a freelancer in the personal finance realm, I’ve grown accustomed to the perpetual nature of tax season. But what’s often overlooked is the benefit of receiving a big tax refund.
The Case for a Big Refund: Why It’s Not Always a Bad Thing
While many experts argue that it’s better to have more money in each paycheck rather than a large refund, humans aren’t always rational when it comes to money. In fact, research suggests that if we want to guarantee allocating overpaid taxes towards a retirement account, taking a large refund and overpaying throughout the year might be the better approach.
This Week’s Top Picks
- Behavioral Finance: Understanding Our Irrationality
Traditional finance theory assumes rational humans participating in markets, but behavioral finance reveals our irrational nature. By acknowledging this, we can trick ourselves into making better financial decisions.
- The Importance of Living in the Moment
Maybe we should earn a little less and live a little more. Our financial independence number will still be there next year, and the year after that. It’s time to reevaluate our priorities and focus on what truly brings us happiness.
- The Power of Compound Interest
The “starve and stack” plan encourages young people to live lean for a set period, saving aggressively and harnessing the power of compound interest to build a nest egg.
- The Blurred Lines of Frugality
Have you ever done something questionable in the name of saving money? It’s time to reflect on our actions and consider the true cost of our frugal habits.
- Luxury Items and Minimalism: Can They Coexist?
One minimalist’s approach to luxury items reveals that it’s not about owning nothing, but about owning just enough.
- The Social Media Effect on Our Savings
Social media has amplified the “keeping up with the Joneses” phenomenon, causing us to constantly compare and upgrade. It’s time to break free from this cycle and focus on our own financial goals.
By embracing the unexpected benefits of a big tax refund and acknowledging our irrationality when it comes to money, we can make more informed decisions and create a brighter financial future.
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