What Happens When You Get a Small Tax Refund?
Tax laws are constantly shifting but there is a notable trend of lowering tax refunds. Studies have found that tax refunds are dropping in recent years. This can be great if you manage lots of businesses or make a lot. Technically it could simply mean you are being taxed less so you receive less. But many individuals throughout Mississippi may rely on that large yearly refund every year for necessary things. For example, you may be waiting for a refund to get a car only to find you received less than you expected. While you can hold on getting a car, can you hold off other needs that you may have been holding off?
How a Small Tax Refund Can Affect You
If you rely on that single tax refund each year for important things, then losing out on that with a lower amount can be damaging to your plans. Your tax refund can mean the difference between being able to get medication or hospital treatment and holding off due to financial stress. In fact, studies have shown that a significant percentage of adults hold off on hospital visits due to things like work and an inability to pay for things like testing and medication. But there are ways to handle getting a small tax refund.
Ways to Handle a Small Tax Refund
When it comes to If you are noticing your tax refunds getting lower year over year then you can do something about it. The best way isn’t to argue tax laws and try to change things to get a bigger refund. The best way is to simply not rely solely on your refund for important purchases and debts.
Do Not Rely on Your Refund Too Much
If you know you will need something in the future such as a new car, then saving up for it is a better alternative to relying solely on your refund. You may even be better off merely getting a car loan as that is a specific amount with an agreement you can predict and manage. The best alternative is to instead think of your refund as something to be placed in your savings instead.
Do not Plan too Far Ahead
Do not sit around and think about all the things you should spend your refund on. It is easy to get used to dropping hundreds on a new entertainment system or maybe even traveling abroad for a week or getting a new computer for your home. Planning to spend your money too far ahead can set you up for disaster in the long run. Your tax refund shouldn’t be a factor in your budgeting and planning until you can file and verify how much you will receive.
Related content: Five Ways You're Overspending And How To Fix Them
Get A Loan in an Emergency
If you are in the Mississippi area and need funds quickly in a bind, then you have the options of a signature installment loan, title loan, or payday loan today! That small tax refund does not need to curtail all your plans if you need speedy cash in an emergency. Click here to find affordable vehicle title loan locations near you.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.