Tuesday is tax day, and according to the IRS, last year’s average refund was almost $3,000 and this years is expected to be about the same. So what are you doing with your tax refund? Steve Siebold has been studying the differences between the middle class and the wealthy for 27 years, and says a tax refund can be a life saver for some, but cause more trouble for others.
“When you get that big refund check in the mail, a left brain – right brain battle begins immediately,” says Siebold, author of the book How Rich People Think. “The left side of your brain, or the logical side, wants to put the money into savings, invest it and make it grow or pay off debt, while the right side of your brain, or the emotional side, wants to go on vacation or remodel the kitchen.”
For those tempted to go on a spending spree and throw the money away, Siebold offers these tips to win the battle of logic vs. emotion:
· Middle Class America is notorious for living beyond their means. If you don’t have any debt and don’t need the extra money, by all means enjoy yourself. If you’re struggling to make ends meet, be logical and put the money to good use.
· Focus on the long-term results of financial freedom and abundance that comes with paying off your credit cards, student loans and any other debt. Most people with credit card debt don’t understand that with interest rates at 15% or more, they’ll be paying off their credit cards forever.
· Don’t get caught up in the moment. When you open up that envelope and see that big refund check, put it down and walk away. If you act on impulse you’re going to get into trouble. Write up a list of the pros and cons of spending the money vs. investing it or paying off debt.
· If you want to spend your refund, invest in yourself by committing to never ending personal growth and development. Get some business and self-improvement books; take some professional development seminars and look into coaching/mentoring programs.
“When it comes to your tax refund this year, put your emotions on the shelf and let reason be your guide,” Siebold says.
About Steve Siebold
Steve Siebold is author of the book How Rich People Think. He spent the last 27 years interviewing some of the world’s richest people to get inside their heads to see how they really think about money. He discovered the differences in thinking between the middle class and wealthy are not only numerous, they’re extreme. His premise: think like a millionaire to become one. For more information and to download five free chapters, visit www.howrichpeoplethinkbook.com.
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