There’s a running joke on the syndicated Judge Mathis show, featuring court cases brought before former Michigan 36th District Court Judge Greg Mathis.
Anytime a plaintiff naively tells the judge that the defendant promised to pay him with income-tax refund money, the audience goes into a mix of giggles, snickers and flat-out guffaws. Mathis stops to explain to the clueless plaintiff why the audience is laughing, once again repeating his admonition not to trust people when they promise to repay borrowed money with a tax refund.
This scenario is a reminder that tax refund checks are much like the American Dream these days: A lofty-sounding thing, full of promise, but often failing to live up to those dreams and promises. Ideally, we should adjust our withholding to keep from giving Uncle Sam an interest-free loan. But for many, the tax refund is the one bright spot out of a year that may otherwise be a living-from-paycheck-to-paycheck existence.
Getting a few hundred dollars back? Great. A few thousand? Oh, that’s jump up-and-down-worthy.
We start daydreaming of, or planning, the things we’re going to do with allllll that money. We make a “wish” list, dividing it into high-priority and low-priority stuff. Dutifully, we put down in capital letters “SAVE,” followed by other un-fun should-dos. (If we’re church folks or philanthropy-minded, “tithe” or “give” will come first.)
But then we get caught up in our wants and our fantasies. Buy that flat-screen TV to finally replace the one that juts out about a mile in the back. Buy all that nice fall and winter stuff that’s now on clearance at Dillard’s and Stein Mart or the chi-chi boutique we usually feel too broke to even stick our heads in. Buy a new laptop or tablet or supplement the slow-as-molasses house computer. (See? That’s a need!) Pay down on a Camaro. Throw a fancy party. Travel the world … or at least to Las Vegas. Before long,our list starts to look like a tally of the crazy things on which drunken sailors and star-crossed lottery winners blow money. It doesn’t help that we’re bombarded with commercials by rapid-refund providers and merchants that urge us to “just bring in your refund check.”
So we count the days until our refund comes, pulling that list back out, changing and/or rearranging what’s on it. But when the check does come, some combination of these three things happens:
The money all ends up going for overdue bills, our children’s needs or the new water heater whose purchase we’d been putting off.
A considerable, unexpected expense comes along (auto repair, anyone?), plucks the check right out of our hands and goes flying off into the night like one of those Jonny Quest cartoon pterodactyls.
It dwindles away, turned to dust by a mix of minor needs and wants.
Next thing we know, it’s once again a tumbleweed-ridden financial ghost town. Still undone: all these 50,000 things we said we were going to do with just those few hundred bucks in refund money … including pay back Aunt Emma, who’s threatening to have us on Judge Mathis.
If only we’d keep a realistic mindset and stop waiting for a “refund” from Uncle Sam. If only we’d just manage our finances well and kept our priorities straight. If only we’d be more realistic about wants versus needs. Or at least, be able and willing to use our refunds to tick off that sensible wish list.
Like the list by Kimberly Lankford on the website kiplinger.com: “10 Smart Uses for Your Tax Refund.” Sure enough, the advice is pretty goody-two-shoes until No. 9: “Prepay Your Vacation.”
“Set aside some money for vacation rather than using your credit card and paying interest long after you have returned,” advises Lankford, contributing editor for Kiplinger’s Personal Finance. “You could also set up the account for other expenses - such as a new car or holiday gifts.”
Ah. Vacation? To Vegas? New car … like that Camaro? And - and shopping for holiday gifts we could get at those clearance sales?
So who says the American dream is all bad?
Nontaxable email: hwilliams@arkansasonline.com
Style, Pages 50 on 03/02/2014