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Why tax time is the ideal time to change your financial outlook

Posted on March 07, 2013

HOUSTON, TEXAS, March 7, 2013Tax time is a great time of year to do a lot of fun things like buy some new pencils, brush up on current tax laws and spend a little quality time with a few of your favorite receipts from the past year. It also happens to be a great time to break up with debt!

“Now, you’re likely thinking, 'My debt is way bigger than my tax refund!' Which is probably quite true, but breaking up with debt doesn’t mean becoming instantly debt-free,” said Tanisha Warner, communications manager for Money Management International (MMI). “It means breaking free from the bad financial habits and circumstances that have kept you locked in a destructive relationship with debt. It means making the changes necessary to find a better path for yourself and your finances.”

And tax time is absolutely a great time to start making those changes! Consider this:

  1. Your calculator is already warmed up. Most people would rather do just about anything other than deal with their finances. According to an online consumer poll conducted last year, 69 percent of respondents never balance their checkbook. But now it’s tax time and if you want your refund you have to at least spend enough time with your finances to complete your return. Why not go a step further? Take this opportunity to really look at your finances and see what’s been holding you back? Because you know as soon as that calculator goes back into the junk drawer you won’t see it again until next year.
  2. You won’t have to guess what your budget is. One of the most invaluable tools you can have in the fight against debt is a good, thorough, monthly budget. During tax time, you’ve got a lot of budgeting information out in front of you. Use it! Simply spending an extra hour of your time putting together a realistic budget will go a long way towards helping you reach your financial goals.
  3. Behold! Your emergency savings have arrived! One of the biggest deterrents to breaking out of the debt cycle is the lack of an emergency savings fund. Think about it: making a concerted effort to shed your debt usually means living on an extremely tight budget, and what destroys a tight budget faster than an unexpected emergency? Use your tax refund as a savings cushion and the next time disaster strikes, you’ll be able to weather the storm and resume your regularly scheduled debt-busting ways.
  4. You can clear away a few of those pesky smaller bills. There are a lot of different theories on the best ways to pay down debt and they all have their good points. In a lot of cases, whatever your bills may be, most of them will be pretty consistent from month to month. If you have a few that are relatively low, you might consider using your tax return to pay them off, which can help create a little breathing room in your monthly budget.
  5. If you need it badly enough, you can buy it – with cash. Of course, you can always just spend your tax refund, but that wouldn’t seem to help you out too much in your struggle against debt. Unless, that is, you’re buying something that you absolutely need – something that’s getting purchased no matter what. In that case, don’t just think about right now, but also consider any significant needs coming up on the horizon. If you can use your tax refund to prevent a future opportunity to fall deeper in debt, then spending your windfall might be in your best interests.

To learn more ways to end your bad relationship with debt, visit or speak to one of MMI’s credit counselors at 866.400.6652.

About Money Management International

Money Management International (MMI) is a nonprofit, full-service credit-counseling agency, providing confidential financial guidance, financial education, counseling and debt management assistance to consumers since 1958. MMI helps consumers trim their expenses, develop a spending plan and repay debts. Counseling is available by appointment in branch offices and 24/7 by telephone and Internet. To learn more, visit or call 866.400.6652