I’m in the Facebook group for a small indie women’s magazine and they post prompts in the group almost daily. The group has members of all ages and stages in life and is surprisingly active for a group of over 850 members. A few months ago, this was their prompt:”You have an unexpected $500 that you CAN’T spend on bills. What do you spend it on?” There were 36 comments on the post, and I was the only person to say, “I’d save it.” Call me old fashioned, call me stingy, call me smart, but if I got the average tax return of $2,782 in April, I’d put that money right into my savings account. Here’s why.
In the three years following graduate school I made around $18,000 a year. No, that’s not a typo- eighteen thousand dollars a year. I was working retail and was vastly underemployed, which I wrote about in more detail here. Those years of a lack of savings have taught me one thing: I like to save money like our president likes to tweet. (Read: a lot.) My dad always made me put away half of my birthday and Christmas money growing up, and it seems to have stuck with me. The comfort I find in having savings eases my anxiety tremendously.
For now, I’m enrolled in the Public Service Loan Forgiveness program because I work at a public university. I say “for now” because the fate of PSLF is very much up in the air with the current administration, but if it doesn’t get the axe for those that are currently enrolled, I’m set to have income-based payments until 2026, at which point my debt will be forgiven. Paying down debt is a great use for extra cash, but the PSLF makes it hard to justify for me.
I’m a 27-year-old millennial. Statistically speaking, the odds are not good for millennials when it comes to savings. According to a 2017 GoBankingRates survey, of Americans aged 25-34, 41% have $0 saved, 20% have less than $1,000, 13% have $1,000-$4,999, 6% have $5,000-$9,999, and 20% have more than $10,000 saved. Personally? At this writing, I have $6,300 in the bank. Seeing that number get closer to $10,000 than $5,000 with one deposit would be legitimately exciting for me.
I own a ten-year-old car with 145,000 miles on it. It’s one repair away from becoming a trade-in for a new car. A new car means a down payment and a car payment, and the more money I can put down, the less I’ll pay in interest over the life of my loan. Having that extra $2,782 would help tremendously with that.
I also own a 98-year-old home. Minor repairs can cost anywhere from $500 and up. Whether it’s an appliance breaking or something seriously malfunctioning, it’s always a good idea to have money put aside for those unexpected homeowner expenses.
What would you do with a $2,782 tax refund? Leave a comment here or tweet me.