How Atlanta Taxpayers Can Boost Their Tax Refund
At first glance, this year's average tax refund of $3,000 might seem like a lot - but for most Americans, it won't last long.
If you simply put your check in the bank, it won't be long before its whittled away by things like rising gas prices and food costs, growing credit card bills and health insurance premiums, and the occasional shopping spree. But there's a way that many of us can stretch our refund, say Atlanta bankruptcy attorneys. How? By using it to get rid of current debt - and prevent future debt.
Maybe you have $5,000 in credit card debt on a card with 20.99% APR. If you're making just the monthly minimum payment, you're probably shelling out $150 a month - and still not doing much more than paying interest. At that rate, it could take more than four years to pay off your debt - assuming you don't add to it.
But what if you put your entire refund toward paying off your balance? You'd painlessly lower your debt to just $2,000. And if you continue making those $150 payments, rather than paying the new lower minimum, paying down debt will only take 1.5 years.
Another option is to apply your refund toward building up an emergency savings account, assuming you don't already have one. In fact, having savings is as important - if not more important - than lowering debt. It's what can prevent you from getting stuck in debt all over again if something unexpected happens - say, you end up between jobs or with some surprise medical bills.
If you use your tax money to pay everyday bills, you're not doing anything to address the root of the problem - the debt that is making the bills difficult to manage in the first place. If you can't handle your debt alone, using Uncle Sam's money (well, technically, it's your own money) can help you get started. And if you're still overwhelmed? Bankruptcy may offer a solution. Find out if bankruptcy can help you lower debt and find a fresh start when you sign up for a free personal debt analysis with one of our Atlanta bankruptcy attorneys.