The Department of Consumer Law in New York City has this bulletin on different ideas of how to take advantage of the refund you receive to complete your taxes. These tips also apply to any amount of money you receive might not be part of your monthly income: A panel, double salary, an inheritance, a raise, etc… Here goes:

A tax rebate puts money in your pocket that can help you pay your bills. If you are careful in handling the refund, you can also use it to achieve other financial goals.

Reduce your debt
Debt interest cost money, so if you cut it, eventually it will help save more. If you have loans or multiple credit cards, first pay the debt with the highest interest.

Start an emergency fund
Place a portion of their refund into a savings account to hold funds for emergencies or financial need. (more…)

If your debt is only $ 10.000 almost never recommend my clients to go bankrupt, but each case is different. Remember that bankruptcy will affect you credit for at least 7 years, but of course, if you cannot pay your debts also be affected. If you do not have any assets (house, car, etc…) In addition, the debt is only credit card I do not recommend that you come out. This decision is affected at the same time, if right now or you’re working on plans to return to work soon (and if the labor market allows).

The worst mistake a person makes is not to call the credit card companies and explain the situation. You have to call them and tell them you want to enter the plan of financial difficulties (Financial Hardship) for them perhaps you can reduce monthly payments so you can meet with them while they fix your situation. This same make the loan consolidation companies that can lower monthly payments.

If you still think your best option is bankruptcy keep in mind that it costs money (maybe more than one thousand dollars) which could be used to make monthly payments of up to one of your cards, and after one year could have good credit yet. If you have no future plans to do anything with your credit or if your credit was damaged in advance could also go bankrupt.

The important thing is that you learn from this situation and you start to have an emergency fund of at least 3 to 6 months of your monthly expenses. If your household spent, $ 1,500 per month should have at least $ 5,000 in a savings account. This seems very hard to do, but if you start saving $ 20 a month from your paycheck that could help you save at least $ 1,000 a year with minimum effort.

Most people have similar feelings when faced with what on the surface appears to be a complex financial decision-making. The explanation is in order. He noted that over the past five years, most news programs have expanded their coverage of the securities market in general or slogans This news of what appears to be the analysis of an emerging company. It aims to be Broadcast The idea is usually along the line “These guys have reported solid earnings and growth opportunities, but could buy when you can …” I remember discussing this phenomenon with a friend of mine told me he often felt as if he had lost the opportunity of a lifetime, if not invest in a company under discussion this time. Did not know where to begin.

Not knowing where to start, this simple truth usually stops most dead in their tracks. Indecision. Information overload. Fear. Everyone is aware of all these elements, but it gets little use to execute their will. (more…)