Skip to main content

Interest-free Loans


Wow, I bet that title grabbed your attention! With that in mind, I want to take you back to a set of questions I suggested you ask your significant other last week. The first one is, “Do we get a big tax return?” If the answer to that is yes, then you are participating in interest-free loans. YOU ARE LOANING THE GOVERNMENT MONEY AT ZERO PERCENT INTEREST. Were you aware of that?

So, if this is you, then we move on to the second question, “Should we change our W-4s to get more with each paycheck?” and the only answer to that is MOST DEFINITELY. If you have lots of debt (or even if you don’t) and are getting a huge refund annually, you need that money every month. Shoot, if you don't have any debt to pay with it, then invest it! What many people do not understand is that it is actually better to owe the government a little bit of money on April 15 than it is to get a huge refund.

Claiming the correct amount of exemptions on your W-4 can be a guessing game. It is best to talk with your human resources or payroll person to find out exactly how to fill out your W-4. You want extra in each paycheck that, if added up, would come really close to the amount your refund.

If, on the other hand, you like loaning people money at zero interest and waiting almost a year to get paid back, then can I borrow 10 grand?

Comments

Post a Comment

Popular posts from this blog

It Happens Like That

And, in what seems like the blink of an eye, Memorial Day is over, school is out (or almost out), and my favorite time of the year is here! I love summer. I love it when the sun comes up early and wakes me. I love flip flops and shorts. I like to be warm (ok, not HOT, but warm). This is when I thrive. And I think it’s an excellent time to take a vacation or road trip. That being said, I plan a long time in advance for a vacation because I won’t finance one–and I’ve taken some pretty amazing vacations! I don’t usually just take off on last-minute road trips, either, but I’m learning to be more flexible in my old age. So I have done that on occasion, too.  Now, this blog post isn’t about the last-minute drives I’ve engaged, cruises I’ve embarked, or the countries I’ve explored (being a debt-free, self-employed, budget-loving, young, empty-nester has its perks!). This post is about getting you to a point where you, too, can take vacations without stressing about paying for it late...
Post a Comment
Read more

Know Your Limits

When I was 17, I drove a 73 Nova. It used to be really easy to do things like changing taillights myself. That is no longer the case. If I tried that on my later-model vehicle (which is more like a computer than a car), I’d do more damage than good, because there are some thing you should just not do yourself. It will cost you more in the long run. That being said, there are probably some things that you usually pay someone else to do that are not getting done right now. My advice is to just be patient; depending on what it is and your skill level, it might end up costing you more to fix your mistakes. Let’s discuss some of those… Obviously, most if not all car repairs are just better done by a licensed, trained professional, including oil changes. They can also correctly dispose of used petroleum products. Depending on your tax filing status, a professional can help you avoid overpaying the IRS. I remember cutting my daughter’s hair when she was little, and I made a me...
Post a Comment
Read more

The One Nobody Wants to Talk About

A young, twenty-something wife and mother of three in my neighborhood lost her husband unexpectedly a few years ago. He died with no life insurance. It left the family financially devastated . She had to sell her house and move into her parent’s basement. A Go Fund Me account paid for her husband’s funeral. I have another friend who lost her husband to a horrible illness when they were in their early forties. This couple had planned ahead and made sure they had the right amounts of the right kinds of insurance in place, including life insurance on the major breadwinner of the family–my friend’s husband. A year or so after he passed, I asked her how she was doing financially. She said her husband had taken care of her financially in death just as well as he had in life. Life insurance is crucial for a specific portion of your life. Do not overlook this. There is more to losing a family member than the overwhelming grief of the loss itself. No one needs financial hardship heape...
Post a Comment
Read more