Tax Return - And the wasting thereof

OtistheGuard

So I'm going to get a hefty tax return this year, over $1000, and I'm starting to comtemplate what I should use it on. My initial idea was to build a desktop gaming computer, with a <40" tv for the monitor. However, my roommate is of the opinion that PC gaming is dead, and that I should spend it on an Xbox 360 instead. And then there is my mother, who wants me to pay off some of the loans that were co-signed by her husband. I'm still in school for another semester, so there is no hurry in getting those paid off on my end.

I'm 23, and 1 semester from graduating college.

tl;dr: What are some things I should look into buying with my tax return? What are you planning on purchasing?

Arminas

Not to be unreasonable or anything, but you could always stash it in a savings account.

Dachshund

Interview suit, shirt, & tie, car, savings account, etc

OtistheGuard

Knowing myself, if I stash it in my savings account I'll use it gradually over time on stuff like dinner, bar hopping, etc. I certianly realize it's the "adult" thing to do.

claypoolfan

I blew mine in vegas this past weekend. True story. Probably should have stashed it away but you only live once.

Also don't let your roommate connive you into buying an xbox so he gets to play for free. If you want a computer get a computer.

OtistheGuard

He actually already has one, with quite a few games.

PeregrineFalcon

Dachshund wrote: »

Interview suit, shirt, & tie, car, savings account, etc

This is actually a good idea. A good suit will last you years and pay for itself many times over. Do you have any other debts that aren't paid down? Credit card? Of course, those would be "Adult things" to do.

Edit - I see you're in Texas. Buy some guns.

Deebaser

OtistheGuard wrote: »

And then there is my mother, who wants me to pay off some of the loans that were co-signed by her husband. I'm still in school for another semester, so there is no hurry in getting those paid off on my end.

Being owned by the bank sucks. The sooner you're out, the better you feel.

Thanatos

Deebaser wrote: »

OtistheGuard wrote: »

And then there is my mother, who wants me to pay off some of the loans that were co-signed by her husband. I'm still in school for another semester, so there is no hurry in getting those paid off on my end.

Being owned by the bank sucks. The sooner you're out, the better you feel.

"Feeling good" generally isn't worth it, especially in this economy.

Given that you've taken out loans to pay for school that you needed a co-signer for, I'm going to guess that you aren't going to be relying on a trust fund. College graduates are finding it harder and harder to find a job these days. Investing in an interview suit would be a good idea; so would saving it. Burning it on a gaming PC, not so much. Especially since you don't want to be in a position down the line where your options are "sell my gaming PC for way less than I paid for it" or "rack up a ton of credit card debt."

Deebaser

yeah, basically DONT waste a grand in this economy. You're going to be in the real world in a few months and spoiler alert:

The real world sucks nuts for 23 year olds at the moment.

Tejs

Pay off part of the loans. It's the only situation where your 1000 dollars is actually worth more than 1000 because of the additional interest you wont have to pay.

EDIT: Unless, those are school loans, in which case, DONT. School loans are cheap interest wise (usually). In that case put it towards whatever else debt that you have.

VeritasVR

Thanatos wrote: »

Deebaser wrote: »

OtistheGuard wrote: »

And then there is my mother, who wants me to pay off some of the loans that were co-signed by her husband. I'm still in school for another semester, so there is no hurry in getting those paid off on my end.

Being owned by the bank sucks. The sooner you're out, the better you feel.

"Feeling good" generally isn't worth it, especially in this economy.

Given that you've taken out loans to pay for school that you needed a co-signer for, I'm going to guess that you aren't going to be relying on a trust fund. College graduates are finding it harder and harder to find a job these days. Investing in an interview suit would be a good idea; so would saving it. Burning it on a gaming PC, not so much. Especially since you don't want to be in a position down the line where your options are "sell my gaming PC for way less than I paid for it" or "rack up a ton of credit card debt."

Oh Thanatos. You're always the voice of financial rationality. Why don't you get out there and live!?

jk

Unfortunately, a savings account doesn't appear to be growing too much recently. ING Direct is down to like 1.25%/month. It's hard to think of something not-so-risky that still has reasonable interest. I was going to put mine into savings but it's hard to justify.

No big loans... other than the fact that I don't mind having a moderate student loan at like 4.5%, considering it's tax deductible.

Any suggestions?

Thanatos

VeritasVR wrote: »

Thanatos wrote: »

"Feeling good" generally isn't worth it, especially in this economy.

Given that you've taken out loans to pay for school that you needed a co-signer for, I'm going to guess that you aren't going to be relying on a trust fund. College graduates are finding it harder and harder to find a job these days. Investing in an interview suit would be a good idea; so would saving it. Burning it on a gaming PC, not so much. Especially since you don't want to be in a position down the line where your options are "sell my gaming PC for way less than I paid for it" or "rack up a ton of credit card debt."

Oh Thanatos. You're always the voice of financial rationality. Why don't you get out there and live!?

jk

Unfortunately, a savings account doesn't appear to be growing too much recently. ING Direct is down to like 1.25%/month. It's hard to think of something not-so-risky that still has reasonable interest. I was going to put mine into savings but it's hard to justify.

No big loans... other than the fact that I don't mind having a moderate student loan at like 4.5%, considering it's tax deductible.

Any suggestions?

The point of saving the money isn't the interest on the account; the point of saving the money is that you can't pay a security deposit and first month's/last month's rent with a credit card. And even if you could, would you really want to?

If you're concerned you'll spend it, throw it in a six-month CD.

OtistheGuard

Grrr.. I should have known my greatest desires wouldn't be supported. So off the top of my head my debts are as follows:

$250 credit card debt
$13,000 Non-subsidized school loans
$7,000 Student Loans from a bank

The credit card debit I'm slowly killing each paycheck (paid off $50 today), so I'm assuming the bank student loan are where I should spend my money. Thanks for keeping me in line.

Thanatos

Kill the credit card debt first thing, no question. Then you should consider paying off the bank loans, depending upon their interest rate, or hanging on to the money if you think you'll just need to accrue more credit card debt in a few months otherwise.

PeregrineFalcon

OtistheGuard wrote: »

The credit card debit I'm slowly killing each paycheck (paid off $50 today)

FINISH HIM

Then throw half of the return ($500) into a separate savings account for use on apartment security deposit/etc, and then the last 25% I don't think is an unreasonable amount to spend on something you want and will get the money's worth out of; ie, don't blow it on hookers/beer/yayo.

Solandra

IMO: Kill the credit card, set aside a fixed amount for your pleasure, and then put the rest towards the bank loan. Since it's a bit over a grand, make the "over a grand" part the cash to burn "guilt free", and then apply the rest to debt.

This plus more than minimum payments is actually the model I've been using for several years, and have gotten myself into a position where my crappy post-divorce-live-in-an-efficiency credit is now very nice just-bought-a-house credit.

PeregrineFalcon

Thanatos wrote: »

Kill the credit card debt first thing, no question. Then you should consider paying off the bank loans, depending upon their interest rate, or hanging on to the money if you think you'll just need to accrue more credit card debt in a few months otherwise.

Selective bolding here because being able to pull $250 out of your savings account to cover an unexpected moving expense, vehicle breakdown, or repair/replacement of a much more necessary item is way better than putting that $250 back on the credit card.

RocketSauce

My wife and I are pretty thrifty and have a decent amount saved. All of my coworkers seem to be barely staying above debt and living paycheck to paycheck. I recently told someone how much I had in our secondary savings account, and the about had a heart attack. Spending isn't glamorous, but you will be glad you have it later on.

RUNN1NGMAN

OtistheGuard wrote: »

Knowing myself, if I stash it in my savings account I'll use it gradually over time on stuff like dinner, bar hopping, etc. I certianly realize it's the "adult" thing to do.

Put it in a CD then.

Disrupter

I look at savings like a high score in like a side scrolling video game.

Does it matter? Eh, sort of. Can you beat the game without getting it high? Sure. Can you enjoy the game without doing so? Definately. But is it a nice feeling to be able to look up there and see that its pretty big. Yes.

Thus, I try to save whenever I can. Im not big on spending other then blowing way too much on consistant dinners out.

My point mainly is, having actual, real life money to deal with life's curveballs is major major stress relief. I know people whos car breaks down and they have absolutely no way to really go on and its a major issue. Putting away this grand would be best to be able to deal with such things.

Id advice that instead of paying off the CC depending on your rate. Cause chances are the interest on 250 over the next 5 pay periods while your pay it off isnt much more then 20 or so dollars. But if you NEED that 250 soon, there are things you cant just plop back on your card.

EggyToast

Paying credit card interest is the stupidest thing you can do with your finances. Pay the card off, and then only use it if you can pay it in full each month.

Think of it this way -- that $250 is probably gonna cost you an extra $50 by paying it off over the next 5 months, so you could pay it off all now, or you could flush $50 of your tax return down the toilet.

For the rest, you wouldn't be asking if you didn't think that blowing it might not be the best idea. Personally, I'm saving mine so I don't get fucked over during the rest of the year. The peace of mind knowing that you actually have some money around is worth more than most consumer goods.

An interview suit is decent, but it's better to shop around for one and find a nice one that's on sale rather than blowing it all now. Since you're not looking for a job yet, there's no rush. So my suggestion is to put it in a savings account and take a breather from worrying about expenses so when you actually NEED a new computer or NEED whatever, you can get it w/o going back into debt.

VeritasVR

EggyToast wrote: »

The peace of mind knowing that you actually have some money around is worth more than most consumer goods.

This is a good way of looking at it.