Got A Huge Tax Refund? Shame on You!

I see you out there, scholars. You ooze sophistication. You don't run from numbers. Being a technical science or engineering major is your life. You smile at the ease of filling out your own taxes on the internet. A week later, you feel good have that $1500+ refund check in the mail. It's time to shop--you've earned it, right? Or maybe you'll invest it, or save half of it.

Silly you.

Shame, shame, shame!

Believe it or not, you just fell victim to the classic ankle-grabbing government..er.."servicing." But you're not alone. I've been served myself. But never again.

When you get a chance, re-check the size of your last refund. Any amount over say $50, is too much. You just gave the Gub'mint an interest-free loan. Why? Probably the same reason I did--I didn't know any better. I was so thrilled to get my $2400 refund--not truly realizing that it was my money to begin with--that they held all year.

$2400..that's $200 extra per month, $100 per paycheck. Now let's say that instead of sending that extra money to the same entity that handles funding for Katrina, you instead you have it directly deposited into an FDIC-insured ING Orange Savings Account that's connected to your checking account. (I'm doing this now.) , with a guaranteed return of about 3.5 - 4% per year. (Wachovia, Bank of America, Washington Mutual, and other bankshave savings accounts that are also FDIC-insured but earn less than 1% per year). While others wait and get their refund with no interest, you can earn up to 80-100 dollars extra, at virtually no risk, just for being shrewd. And there may be returns out there better than ING.

And if you're really serious, you can move that extra savings into your 401k/IRA/BSA....

So now you know that letting the Government manage your money isn't the best idea, how do you fix it so the same thing doesn't happen next year? Go into human resources, and ask to modify your W-4. You need to make more claims so that the government withholds less. You may even be able to do it online. Questions? Comments? Hit up the Comments section! >>>