Too many tax refunds: The signs and symptoms of intaxification

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As the saying goes, the only certainties in life are death and taxes, and paying one’s dues to the country is among the duties any citizen must make. Paying too many taxes is common, and many citizens have found that they can save a pretty penny by getting tax refunds. But while paying too much tax than is legally required is bad, looking forward to tax refunds is a misguided and unhelpful habit that does nothing to help bolster one’s finances.

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The informal term for the euphoric feeling a person gets from receiving a tax refund is called intaxification, which is described by Investopedia as “somewhat misguided” because tax refunds are given due to an excess amount a taxpayer paid during the previous year. This is likened as an interest-free loan given to the government and paid back yearly.

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Many agree that this practice is not a good way to save and earn money as it indicates that the person is still paying a higher amount of taxes than necessary. Instead, it is recommended that the taxes paid every paycheck should be reduced through tax breaks. Talking to an experienced tax advisor or HR Department representative on matters pertaining to gradual reduction of tax burden is a key step to improving one’s financial situation.

Waiting for tax refunds is a futile and unhealthy practice that does nothing to improve one’s financial standing. While taxes are inevitable, the burden they present to the taxpayer can be lightened gradually over time.

Financial expert, media personality, and keynote speaker Matt Sapaula is committed to helping the average person save up and generate wealth. Visit this website for more on personal financial planning.

Starting small: Making that money (and keeping it)

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What many people fail to realize in their attempt at wealth generation is that, by and large, it all depends on how much money they make after all expenses are subtracted from their income. Many are often under the impression that to make money, one must make a lot of money through income, usually through a higher-paying job.

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And while it is true that those with high amounts of cash tend to be catered to by mainstream financial institutions, the greatest aspect of successful personal financial planning for retirement and beyond can be done for rather miniscule amounts.

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The key act in making personal finance work is not the amount of savings made but the act of saving itself. Having a mindset that emphasizes on saving money and having as much as one can spare saved up is the penultimate foundation of sustainable financial, investment, and retirement plans. Having any amount of income saved is just as important as making a lot of income.

There is no magic number one must reach to begin planning for one’s financial future. Financial planning rests not on how much money one starts with but how often and how much of that money is saved up. The important thing is to get started.

Matt Sapaula is a financial planning expert and media personality. Visit this website for more on him and his work.