Debt Reduction

Although most people know it is unwise to pay in too much money in taxes every year, it's rather easy to do so. When tax overpayment happens, tax refunds are the result. This can often leave people wondering what to do with all that extra cash. Okay, maybe not wondering what to do (that new T.V. may be calling your name...), but it might leave you wondering what you should do with a hefty refund. Here are the basics about the wisest decisions for a windfall of cash.

Pay Down Debts

If you have a child or know any little rugrats, you probably have had some quality, first-hand demos on what it's like to be stubborn.  You know what I'm talking about.  Mom gives a command ("You have to eat one spoonful of peas or it's no dessert for you, little miss!"), and the child who was so angelic all of three minutes ago gets that don't-want-to-can't-make-me glint in her eye and hunkers down for a full-on display that is the very epitome of being hard-headed. 

When I bring up finances with my girlfriends, the first response is usually something like, “Yes, I know. I need to get out of debt.” Sometimes they start complaining about student loans crushing them, and sometimes it's credit cards. Regardless, the outcome is always the same: They think that being debt free is the definition of being financially fit.