If you live paycheck to paycheck, like the majority of Americans, you really look forward to your tax refund.
I’m a big proponent of investing at least 20% of your refund in the stock market. But the reality is that most people’s tax refund will go to catch up on past due bills or some other “emergency”.
Many tax services, such as H&R Block, will offer you the opportunity to get your refund immediately. Now if you’re in a financial bind, I understand why you might do it. But it’s not wise.
Let me explain.
You work all year for this tax refund. This is your money coming back to you. If you opt to receive a refund anticipation loan, you’re going to pay interest on the money you’ve earned over the last 12 months. That makes absolutely no financial sense at all!
Decisions such as taking out a loan against your tax refund have contributed to your poor financial situation in the first place. Start making good choices. Be patient enough to wait to receive your full refund.
My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.
Click the image of the book at left to be taken to its Amazon page. (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)
4 thoughts on “Refund Anticipation Loans Are Not Wise!”
Great post 😁
Reblogged this on AnneMarie's Place and commented:
Good morning! Thanks for joining me as I sip my Cafe Bustelo.
Many of us, myself included, still have yet to get our taxes done.
I wanted to share this blog post from Eric at Wealthy Joe Investing regarding refund anticipation loans in case anyone was thinking of taking advantage of that program.
Don’t do it! Our refunds are by and large smaller as it is this year, and these programs skim a lot of money off the top of your payment before it reaches you.
In general, I find that if something is promised to you in an instant, there’s going to be a catch.