Chicago Taxpayers Find Secret to Getting Bigger Refund
This year's average tax refund is more than $3,000 - but there may be a way to stretch it even farther.
With gas and grocery prices going up, it would be easy to allow that money to simply disappear, say Chicago bankruptcy attorneys. A couple bills here, a little shopping splurge there, some unexpected car repairs, and - poof - your bank account is back to where it was before. But there's a way to keep your refund alive long after you deposit it. How? By putting it to work for your future.
By using your check to pay down debt - or to prevent future debt - you will lower your payments permanently. Let's say you have $6,000 in credit card debt. If you're making minimum monthly payments on a card with 24.99%APR, you're shelling out about $200 per month - and at that rate, it will take 48 months to pay off your debt. If you add to your balance, of course, it will take even longer.
But let's say you put that tax refund towards your balance. Suddenly you only have to pay interest on $3,000. Your minimum payment will drop, of course, but if you keep paying the same $200 as before, you can reduce the rest of your debt in just 19 months. If you're lucky enough to get a tax refund next year, you can do it even faster.
Do you have an emergency savings fund? If not, you might opt to use at least some of your refund to start one. By paying down debt and setting aside several months worth of living expenses, you'll be in a better position to avoid falling back into the debt trap next time you're dealing with a hardship.
When money is tight, it can be hard to part with a sudden windfall. But with all the money you'll save yourself in interest, you'll be getting something worth a lot more than 3,000 bucks. And if your refund isn't enough to make a dent in your debt, don't give up - get help. Bankruptcy has assisted millions of Americans in finding a fresh start these last couple years. With a free personal debt analysis courtesy of our Chicago bankruptcy attorneys, find out if it can help you, too.