Tax Returns: The Least "Free" Money You Can Get 💸

Here's the thing about tax refunds - it's YOUR money that you've been letting sit in the government's account all year. Think of it like putting your cash in a savings account that pays exactly zero interest (actually, with inflation, you're losing money... oof).

Quick math: If you're getting back $3,000 in your refund, that's $250 of your own money just... sitting there... each month. Not working for you, not helping with bills, not earning interest, just vibing in the Treasury Department's account. And unlike those sweet high-yield savings accounts offering 4-5% right now, this money's earning you exactly nothing. Nada. Zilch.

It's kind of like stuffing your money under your mattress, except it's not even your mattress - and you can't get to it until tax season rolls around. Not exactly a winning financial strategy, right?

Let's talk about what that money could've been doing instead of chilling in the government's account. Say you're getting that same $3,000 refund - if you had put that extra $250 monthly into a high-yield savings account at today's rates (4-5%), you'd have earned actual, real money on top of your $3,000. Or better yet, if you've got credit card debt at 24% APR, that's like setting your money on fire while waiting for your refund.

The real kicker? If you invested that money throughout the year instead (thinking long-term here), you could be looking at actual gains instead of just getting your own cash back. The S&P 500 historically returns about 7% annually - that's your money making money, instead of making nothing.

Here's where it gets practical: Having an extra $250 in your monthly paycheck instead of your annual refund can be the difference between "I guess I'll put this emergency on my credit card" and "No worries, I've got this covered." It's about having money when you actually need it, not when the IRS decides to give it back.

Think about it: How many times have you stressed about a bill or unexpected expense during the year, all while Uncle Sam's sitting on your money like a dragon on its hoard?

Look, I get it - tax refunds feel good. It's like finding $20 in your jacket pocket, except it's definitely your $20 that you forgot you put there. The good news? You can change this. Talk to your HR department about adjusting your W-4, use the IRS withholding calculator (yes, we’re gonna use the government to get back our stuff.. from the government), and get your money working for you throughout the year instead of giving the government an interest-free loan.

Because at the end of the day, the best tax refund might be the one you never get - because you kept your money in your pocket where it belongs.

Thanks for reading!

Jake

P.S. And no, adjusting your withholding shouldn’t make you owe a massive bill in April - it's about getting as close to zero as possible. You don’t owe them and they don’t owe you, everyone’s happy.