YUMA, Ariz. – The Internal Revenue Services says nearly 8 out of 10 Americans will be expecting a tax refund this year.
If you’re thinking of spending your tax return you may want to think again. Reed Lohrenz of Independent Financial says investing your money in the future is the wise thing to do with the lump sum of money. Lohrenz says when people first get the money they should control their impulses.
“Their first inclination is to take that tax refund and spend it on themselves buy a sofa, buy a new car, do something and have fun with it. What the first thing they should do is look at the over all priorities,” Lohrenz said.
Some residents in Yuma say they plan to spend their tax return on themselves and their family.
“Spend some money with my kids and just saving it,”Crystal Granados
But not everyone is getting a tax return this season, Sondra Dralindsey says she will owe money instead.
“In the event that you make money, you pay taxes,” Sondra Dralindsey said.
In a recent poll by Bankrate.com more than 84 percent of Americans say they plan to pay off their debt with the tax return.
Lohrenz says that he couldn’t agree more with this, “Maybe it would be more wise to pay-off that debt so that they don’t have the burden.”
Other financial websites site like nerdwallet.com show that the average American is nearly in $15,000 in credit card debt alone. That’s why Lohrenz says paying off debt would be a healthy money choice.
Lohrenz says it’s important to also invest in the future like looking into a retirement fund or an IRA would be beneficial.
“Since the market is down by seven percent since January 1st it might be time to start a retirement account, so that they can buy into the market while it is on sale,” Lohrenz said.