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.
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