What are you doing with your tax return?

  • Published
  • By Capt. Nathan Broshear
  • 505th CCW Public Affairs
An Airman walked into my office the other day excited about the new flat-panel television he was about to purchase. Curious as to how the Airman could afford such an extravagance, I asked how he’d pay for such a pricey item.

He smiled and said, “I’m buying it with my tax return money.”

I’ve taken it as my life mission to help young troops avoid the pitfalls of modern personal finance. Be it insurance scams or predatory auto dealers, I believe it’s incumbent upon supervisors, officers and co-workers to help our up-and-coming Airmen prepare for a secure financial future.

Using one’s tax return money for a brief pick-me-up at the local electronics store is tempting. 

I’ll admit that in my younger days, I once blew a check from Uncle Sam like a rock star trying to make the cover of a tabloid. But I’ve learned my lesson, and I hope to help you resist the temptation.

So what should you do with your refund check? First, let’s make one thing clear: the check you receive after filing your taxes is a tax “return” or “refund” — the money in that check didn’t materialize out of thin air, it was yours all along!

There are a wealth of financial experts out there with different opinions as to what you should do if you’re expecting a tax refund.

The one common denominator is this: if you have credit card debt of any kind, it’s imperative that you attack that albatross first. Credit card debt is like a bad infection; it’ll eat you alive if you’re not careful. With the average American carrying well over $5,000 in debt at an average rate of 18 percent, there are few investments that will serve you as well as retiring the platinum card. Paying off credit card debt should always be first on your list.

If you’re still reading you must have zero credit card debt and a fully funded retirement portfolio…good for you! Here are some other wealth-generating ideas for your tax refund: start or fully fund a Roth IRA or other retirement plans; pay down your mortgage, start a college savings plan for your children; start or beef-up a “rainy-day” fund; fix your car; give a portion to charity; open a brokerage account and buy solid, dividend-paying stocks; purchase new energy-saving appliances or windows; or invest in yourself by learning a skill or finishing a degree program. 

No matter what you choose to do, think about the long-term implications.

Is this something that will cost you more money or something that will make you money?
The wealthy didn’t get their fortunes buying items at the mall.

No matter what your rank, it’s important for you to look out for your fellow Airman when they’re tempted by the comforts of instant gratification.

Help your troops make sound financial decisions with their tax refund.