Anchor: Good morning and welcome back. The time is now 6:25. Our money expert Kurt Pearson is here this morning.
Anchor: Yes, it is tax season and a lot of people have filed their taxes and maybe have a refund check on the way. So we want to talk about what people should do with those refunds.
Kurt: Well of course there are always so many things that you can do with money. What I like to encourage people to do ahead of time like especially when they’re setting those New Year’s resolutions is to set some parameters on percentages. So if they know during the year some a windfall of sort comes their way a percentage is going to go to savings, a percentage to spend on a lifestyle item, a percentage to gifting perhaps, a percentage to pay off debt. So you have those categories kind of itemized out and you’re prepared and you’ve planned ahead. Otherwise our mind starts playing tricks on us and we begin to really dream ahead of time before we even get the money in our hand, “hey we’re going to do this, we’re going to do that.” And it becomes a real tug of war sometimes. If you plan ahead with those percentages it can help.
Anchor: So you’re talking spending, saving and sharing as the three big categories. Break some of those down. What are some ideas if you want to spend, save or share.
Kurt: Well, of course on the savings side you always want to make sure your cash reserves are adequately funded because life does happen as we know and sometimes you need those reserves for certain reasons. So that’s the first area to look at and then your intermediate term goals after that. On the spending side a windfall refund like this can be good to spend on one of those lifestyle items that maybe you can’t afford out of your monthly paycheck. So that’s another good way to look at it. The gifting idea: sometimes we have a pledge that we’ve made or whatever that we can wrap up. And then paying off debt is also a good goal to consider.
Anchor: Any other advice as far as the refunds go? Should we even be getting a refund check? A lot of people look forward to it but…
Kurt: Well, yes, and we were talking before we went on air about doing some planning ahead of time so you don’t get that surprise. The surprise is kind of course on the positive side and sometimes on the negative side, so doing some tax planning throughout the year before you actually have to prepare the forms is always a good idea. And I always like to see people come out just about even so you’ve used your money throughout the year and maxed it out.
Anchor: Instead of the government using it.
Anchor: Alright, well Kurt thanks so much for your time and if you have any questions you would like Kurt to answer you can contact him at Compass Financial. That number is 515-327-1020. Online at CompassIowa.com.