Tax refund

Windfall Spending: Long Term, Goal Reward, Fun Money

Tax day today (in the USA)! With lost income from the pandemic, the tax refunds might be higher than usual. And coping with the pandemic might mean that for many people that tax refund will go to simply keeping afloat. But in more conventional times, the “tax refund check” is one of the big cash windfalls of the year for many people. While there is a temptation to become a “$50 millionaire”, BenefitsPro’s article “6 tips during tax season for employers to highlight” outlines a more sensible allocation of these monies:

  • 70% LONG TERM – “towards long term financial stability
  • 20% GOAL REWARD – “reward to herself when she achieves her next financial goal
  • 10% FUN MONEY – “nearly impossible to get a big check and not have some fun