USE THE IRS TO HELP YOU SAVE MONEY: REFUNDS

If you have difficulty saving money, you can use the IRS to help you save.  How?  That’s what this post explains.

I have a problem saving money…money burns a hole in my pocket.  But this weakness of mine has not hurt me because I use a simple technique to save money despite my weakness.  Very simply, I have the IRS withhold much more money than I estimate I’ll owe in taxes.

Most financial planners advise against my method for saving.  Their opinion is that you don’t want to have the government hold onto your money when you could be earning interest on that money.  However, in the days of 1 % interest rates, plus my being most likely to waste and not save any extra money from my paycheck/pension, that argument does not make sense.

The strongest argument for having the government help you save is the following:  the Federal government takes money from paychecks before you see it.  Many people have great difficulty saving and would therefore save nothing without the government withholding money from pay.  In other words, 5% interest on 0 savings is 0. ..and that’s what I and many others would have saved without government withholding, 0.

With the tax refund I receive each year from the IRS I pay off credit card debt or do something else requiring a chunk of money.  But, of course, you can use your refund for anything you like:  a vacation, home improvements, auto repair, etc.

I’ve used the IRS to help me save money for years, and  I found that it works very well. The only qualifier, however, is that with today’s rampant ID fraud, there is a slight possibly that someone else may receive your tax refund. Try doing it this year and see the results for yourself.

 

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