Tax to reduce debt
I found this article over at mynewchoice.com and I have to say it is right on the money. I personally have used my tax returns to buy “stuff” and never thought of using the money as a debt reduction tool. A very powerful one as pointed out in this blog.
This all changed about 2 years ago when the debt was too much and I need a way to really jump start my debt reduction. The first year I used most of the taxes to pay debt and i adjusted my W-4 so less would be with held. The next year I got less back at the end of the year and had more to pay off debt through out the year.
I still get money back at the end of the year so I need to adjust my W-4 again this year.
For anyone looking to really start to create a debt reduction “snowball” tax time is a great way to kick it off.
With the average American household carrying about $8000 in credit card debt, the average tax refund of approximately $2500 could eliminate over 30% of that household credit card debt. Unfortunately, many people view a large tax refund as a windfall and rarely spend it wisely.
Would You Like an Extra $200 Per Month? » My New Choice
technorati tags:debt reduction “snowball, debt
One Response to “ Tax to reduce debt”
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mynewchoice says:
September 25th, 2006 at 5:58 pm
Thanks for the reference to my article. It is really amazing some times to hear people talk about struggling from paycheck to paycheck yet their receive a fat refund every year.
With a little time spent doing research and planning, these people can often put more money in their pocket every month and live more comfortably.