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Old 02-04-2015, 09:33 AM
 
218 posts, read 341,114 times
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Hi all,

I am aggressively working to build up my savings account, at the same time I'd love to take a chunk out of my personal debt as well.

I just recently filed my tax returns and am getting a couple grand back. I was wondering if its a better idea to through it into my savings account, or pay off the debt on my credit card?

As for my credit card, I have a decent sized credit limit and my debt isn't above 21% of that limit at the moment, so it's not high enough to negatively affect my credit score, so that's not concern at the this time.

So back to my original question, what is the best use of my returns regarding those two options?
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Old 02-04-2015, 09:39 AM
 
Location: New York
1,096 posts, read 958,042 times
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If you have $0.00 savings now I would save about $1000 and then put the rest towards your credit card debt.

There really isn't anything good about credit card debt assuming there is an interest rate.

edit: it would really help if we knew the amount of CC debt and your income.
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Old 02-04-2015, 09:48 AM
 
218 posts, read 341,114 times
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Quote:
Originally Posted by jms493 View Post
If you have $0.00 savings now I would save about $1000 and then put the rest towards your credit card debt.

There really isn't anything good about credit card debt assuming there is an interest rate.

edit: it would really help if we knew the amount of CC debt and your income.
If it helps to paint a better picture of what I am working with I can say that, I have $10,500 in CC debt. Aside from that my income is $77,000.

Last edited by CityScape0322; 02-04-2015 at 09:57 AM..
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Old 02-04-2015, 10:02 AM
 
Location: New York
1,096 posts, read 958,042 times
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Save a $1000 and put the rest of towards the debt. Get rid of this debt ASAP. I assume there is a high interest on that balance.
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Old 02-04-2015, 10:12 AM
 
8,686 posts, read 5,056,652 times
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Tax returns are the forms that you file. You can't pay debt or build savings with them. You should just put them in a big manila envelope marked "2014 Tax Returns" with all supporting documentation and store them someplace safe.
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Old 02-04-2015, 10:15 AM
 
24,843 posts, read 32,294,958 times
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Quote:
Originally Posted by Petunia 100 View Post
Tax returns are the forms that you file. You can't pay debt or build savings with them. You should just put them in a big manila envelope marked "2014 Tax Returns" with all supporting documentation and store them someplace safe.
Sometimes we just have to stop and think what the person meant.

I understood it.
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Old 02-04-2015, 10:18 AM
 
218 posts, read 341,114 times
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Quote:
Originally Posted by Petunia 100 View Post
Tax returns are the forms that you file. You can't pay debt or build savings with them. You should just put them in a big manila envelope marked "2014 Tax Returns" with all supporting documentation and store them someplace safe.
I think everyone else understand what I meant, however I'll clear up confusion so that I can be clear to you as well, I am referring to the refund I'll be getting back in a few weeks from the forms that I filed.
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Old 02-04-2015, 10:33 AM
 
18,719 posts, read 13,492,794 times
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If your income is relatively stable year over year you should change your withholding so that you get a few hundred bucks more a month and you can pay off the debt or save it instead of waiting until next year to get it all
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Old 02-04-2015, 10:35 AM
 
8,686 posts, read 5,056,652 times
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Quote:
Originally Posted by CityScape0322 View Post
I think everyone else understand what I meant, however I'll clear up confusion so that I can be clear to you as well, I am referring to the refund I'll be getting back in a few weeks from the forms that I filed.
Oh, you meant tax refunds. Now it makes sense.

The best use of your money depends on your circumstances.

-Does your employer offer a retirement plan with a match? If so, your highest priority should be to contribute enough to get the match. If that is done...

-How is your cash flow? Are you able to cover expenses which arise, or are you forced to turn to credit to cover them? If so, you need some savings AND you need to take a hard look at where your money is going. Trim expenses. If you have sufficient cash flow...

-What is the rate on your debt? If it is high, you want to pay it down as quickly as possible. You might also want to explore refinancing the debt to a better rate.

So, where are you? Are you capturing any available employer match? Is your retirement nest egg on track? Do you have a budget? How much do you have in savings right now? What is your debt costing you?

If you don't want to answer these questions on the thread, that's fine, but please think about them.
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Old 02-04-2015, 10:39 AM
 
12,665 posts, read 9,904,693 times
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Quote:
Originally Posted by CityScape0322 View Post
If it helps to paint a better picture of what I am working with I can say that, I have $10,500 in CC debt. Aside from that my income is $77,000.
What are the interest rates?
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