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The Key to Tax Time

Smart Splurging

For many, tax time is the most anticipated season of the year. In fact, for consumers receiving a refund, it’s “payback time.” Before you take the money and run (to your nearest mall or entertainment venue), it pays to have a plan.

Smart splurging can actually help keep your budget on track because it can keep you from feeling deprived. The following steps should help you self-indulge with a clear conscience:

Determine the treat. Make sure your splurge is worth every penny. Start by making a wish list and prioritize. For each item, ask yourself if it is something you will use, enjoy, or remember this time next year.

Make sure it works with your budget. Review your budget and make sure your priorities are paid first. The average family has a credit card balance of $7,000, and pays out $1,000 a year on interest alone; perhaps the greatest luxury is to pay down debt.

Be smart at checkout. Plan ahead and stick to your plan of what to buy, when to buy, and where to buy. Don’t be trapped by impulse buying. Commit to shopping around for the best deal.

Stick to the refund. Don’t allow this spurge to cost you later. If your refund amount is not enough to cover the cost of your splurge, consider having a garage sale, collecting spare change, or working overtime to come up with the extra cash.

Finally, it is human nature to “want” things that you don’t really need. Understand that you will always have wants, but it may not be financially responsible to indulge in every desire. An occasional treat or splurge is more enjoyable when it is planned and affordable.

The folks at Money Management International exist to educate and inform consumers about their financial choices. We are not accountants, and cannot answer tax-related questions. For tax information, visit

In This Section:
» Overview
» Facing the Spend or Save Struggle
» Smart Splurging
» When you owe the IRS
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