Tax Refund Check And Why It Can Hurt Finances Shared By Debt Consolidation USA
May 31, 2018 (PRLEAP.COM) Business NewsThere are a lot of consumers who are happy receiving their tax refund checks every year but Debt Consolidation USA explains why it might be hurting their finances. The article titled "Why A Big Tax Refund Check Could Be Hurting Your Finances" points out some of the reasons why a tax refund can have negative effects on finances.
The article starts off by explaining how it is always better for a lot of people to be receiving a tax refund check compared to paying taxes. However, the article points out that this can be a deceptive situation because consumers tend to overlook the fact that overpaying taxes robs them of financial opportunities.
The article shares that consumers could have made extra credit card payments early on if they had the money. This would have saved them interest payment over a period of time. This is because making minimum payments on a card gives lenders the go signal to start charging fees and other charges increasing the amount to be paid by consumers.
The article also explains that having the money early on could have been used to increase their emergency fund. One argument people usually make is that they can simply put their tax refund check in their reserve fund. That is possible but the only thing people need to realize is that emergencies do not follow a schedule. If it happens before receiving their refund, they would wish they have more in their emergency stash.
Another way tax refund checks actually hurt people's finances is when they start looking at their retirement fund. One of the tools used to increase a retirement fund is compound interest. This works best when people save up early enough so they get to earn interest on top of interest. To read the full article, click https://www.debtconsolidationusa.com/personal-finance/big-tax-refund-check.html