EGG HARBOR TOWNSHIP, NJ (March 20, 2012) – If you’re like a lot of people, you filed your taxes quickly and now you’ve got a couple thousand bucks back from the IRS, and it’s burning a hole in your pocket. But before you splurge on a new wardrobe or a new piece of electronic equipment – Marc Ludwig, Allstate New Jersey Exclusive Agent for Egg Harbor Township, Northfield and Berlin, says to STOP, drop that credit card, and roll out a few alternatives for consideration.
“That might be hard to do when you get a refund,” Ludwig said. “But saving money now can earn you money in the future.” So instead of immediately spending the refund, Ludwig offers five steps to avoid Shopping Spree-itis:
1. You’re about to purchase a rocking new car stereo and some CDs. STOP! Not all CDs are made alike. Some actually make you money. These CDs are called Certificates of Deposit. You can buy them with a maturity or holding period as short as 30 days or as long as five years.
2. The smell of new-car leather has got you all aflutter. But before you buy a new car, STOP! Gaze into the big, innocent eyes of your children. According to the National Institute for Consumer Education, the costs of a college education have more than doubled in the last 10 years. The 2004 Trends in College Pricing survey from The College Board shows that total student expenses average $20,082 per year at private institutions, and $5,132 per year at public institutions. Have you thought about a 529 College Savings Plan or a Coverdell Education Savings Account? Just imagine the smell of the leather in your successful kid’s limo when it comes to pick you up.
3. You’re about to hand over your credit card to the cashier to buy a fancy do-it-all gadget that mows the lawn, cleans the pool, and cooks a mean barbecued steak. STOP! Look at your credit card balance. Think about the interest rate. If your credit card interest rates go up, that means you’ll be forking over more cash to pay off your debt.
4. Tropical sun, coconuts, warm water: A Hawaiian vacation is a click away. STOP! Now imagine your teeth sitting in a cup next to your bed at the nursing home. According to the Federal Long Term Care Insurance Program Web site (http://www.opm.gov/
5. The pretty designer outfit is off the rack and almost in the shopping bag. STOP! What’s more critical – a fashion emergency or an emergency fund? Some financial professionals recommend keeping emergency funds that will get you through one year of unemployment. That’s longer than your new outfit will be in style.
When that tax refund shows up, it can be a great reminder to review your finances and make sure you’re on the way to meeting your financial goals. Consider consulting with a financial professional to review your current insurance and financial needs and see if you have what you need to protect what you have today and prepare you for tomorrow.
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