We’re in the middle of doing our taxes and a few nights ago we were talking about what to do with the extra money. That got me thinking about the tax returns of my youth. Ah, to be young and not have any bills.
When I was in high school and got tax returns I remember spending it on stuff I didn’t need. I’m pretty sure I didn’t save any of it but I also think it was no more than $200 or so. A full tank of gas, a new outfit and a pair of shoes, a couple nights out with friends and that was that.
In college I got a little wiser. I remember saving 50% for traveling (see, wiser), 25% of it on text books and 25% on clothes or just stuff. I was working 35-40 hours a week and making pretty good money, so I remember the returns being much larger than high school.
Post-college but pre-grad school I was living in DC. Again, I remember half the money going into savings and with the other half I ‘d buy a plane ticket home for a summer visit and use the rest on things I needed but normally couldn’t afford (heater, new pans, etc.). OK, there was probably an extra night of drinking and whatnot. I did have one year, right before grad school, that I had to pay. That was a shocker and I’ve learned my lesson.
I didn’t file a tax return in grad school. I was living and working part-time in England. Now that I think about it, I don’t even know if there was some equivalent of a tax return I was suppose to file when I was a student there. Opps.
Post grad school things were back to normal. I was working again but had some new debt from grad school. If I remember correctly, I saved 25% for a rainy day, 25% for traveling, 25% went to extra payments on my student loans and 25% went towards fun stuff and few tickets on the Chinatown bus to visit Micah. I was living in DC at the time and Micah was living in Brooklyn. I do remember having to file for a state income tax return for the first time. We don’t have state income tax in Washington State.
Post DC and pre-wedding and house, my tax return spending was pretty much the same. I eventually paid off my grad school loan and had that much more to spend every year. I put more into my general savings and travel savings but kept the fun spending the same.
Once we knew we were building a house. All the fund spending was gone. I saved 25% for travel and everything else went towards the house. I think it paid for part of our architect fees. Not so fun.
So now we’re in the house and the breakdown of the spending isn’t as great as it used to be. As it’s looking now, it will probably be 20% to savings, 20% to travel, 10% on fun, 25% towards an extra mortgage payment and 25% on the house. I know, so exciting. 10% is probably going to be $100, maybe more. That’s a fancy dinner or a few cheaper meals out. Nothing too exciting. Very lame.
We could spend more on fun but we’re being practical and paying down a little of the mortgage. Our savings account interest rate isn’t as high as the interested rate we pay on the house, so it makes sense to pay more and not save more.
And the house. You are never done with the projects. I bet we spend the 25% on the yard. We want to put up a wall at the top of our stairs and plant some climbing vines shield us from the view of the neighbors yard (and cats). Yes, all super fun.
Tax returns as a grown-up (with a mortgage) isn’t really that fun. More fun than paying the IRS but not as fun as it used to be. I can’t wait until we’re 50 years old (hopefully sooner) and won’t have to designate a portion on the mortgage. That’s actually more depressing than it is reassuring.
How is everyone else spending their tax return?