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John E. Pytte Jan. 9, 2017

calculatorIt’s January and that “Merry Christmas Time” of two weeks ago has suddenly turned into “What Am I Going To Do About My Taxes?” time. If debt consolidation or elimination is on your mind, you’re probably looking forward to that check from Uncle Sam. If you did a little advance planning about a year ago, your main concern now should be what to do with your tax refund check. Even if you didn’t plan ahead, you should keep reading because you still may be able to save yourself money in the upcoming year!

1. Even if you dread the paperwork, file your 2016 taxes now to get your refund quicker.

Most people have an aversion to filing taxes, even if they are due a refund. If that sounds like you, just remember that your tax refund isn’t doing you any good if it’s sitting in the Treasury Department vault or somewhere other than in your bank account. This means filing your state taxes early as well. By filing early you get your tax refund early and you can use that money to use for debt consolidation and improving your financial health in 2017.

2. Pay off as much high interest debt as you can with your tax refund.

Before you tax refund arrives, sit down and make a list of your higher interest rate debt such as credit card or consumer finance debt. Now see how much of that debt your refund will either eliminate or at least pay down. If you need help with doing the math, most cities and larger towns have free seminars or “walk-in” sessions around this time of year to help people in need of a little financial advice.

If you have fallen into the “cash advance” or “payday loan” trap, do everything you can to get out from under that high interest quicksand. Even if it takes your entire tax refund! If you have a loan that requires more than $100 per week just to pay the interest, you will wind up saving enough to make a serious dent in your other debts.

3. Promise yourself that you will completely pay off at least one debt with your refund.

Debt consolidation is a good thing, provided that you don’t go into even more debt to pay your earlier debts. If you pay off a debt that is currently costing you $100 per month by April, you will have freed up $900 by the end of the year for other debts. Just remember, the more debt you can retire earlier in the year means more debt you rid yourself of later on in the year.

4. If you don’t have to spend money, then don’t spend it.

If you’ve been promising yourself some purchase as a “reward” for doing without it all last year, try to think about your little treat this way: If not having it for a year didn’t cause you some major physical trauma, it probably won’t hurt you to wait a few more months to reward yourself. Until then, use the purchase price to pay down even more debt.

5. For once, make financial New Year’s resolutions and keep them!

Money-related resolutions generally don’t fare as well as any of the others but you should still give a try one more time. Who knows? Maybe this will be the year that you can finally bring everything together and then, at this time next year, you can enjoy your tax refund without feeling guilty for the rest of 2018.

Happy New Year from Georgia Debt Relief and may you conquer your financial issues this year! Don’t hesitate to ask for help with your debt concerns, especially now that a new year has begun. Imagine being able to save money for future purposes instead of seeing it go down the loan and interest drain.