I Want to Use My Tax Refund to Pay Down My Debt. – Laurie

“Dear Steve,

Okay you asked, I have my five credit cards($850),
($550) an overdraft, gas card, timeshare, 2 car loans and a mortgage. I also have to pay my property taxes for my home($1050) and the time share($883). I want to knock out 2 cards one both under $150, and try to pay down my overdraft($1200) and bank credit card ($3250). I don’t know how much I am getting, I made a little more this year than last, so I am guessing around $5k. I wanted to save something.

What should I pay off and what can I save?


Dear Laurie,

We can make this hard, but I prefer the easy and lazy way out of debt. I would suggest that you follow the debt snowball method of reducing and eliminating your debt. Follow the debt snowball link for information.

If you are getting a huge refund like this that tells me you are having too much taken out of your check each month. Consider increasing your deductions to reduce the tax taken out each payday. The goal is to break even at the end of the year and I’m positive you could use the extra cash each month to reduce your debt.

What ever you get in your refund, put 1/3 in a boring old savings account for an emergency fund, use 1/3 to pay down debt using the debt snowball approach, and the last 1/3, go blow it and have a good time, really. It’s perfectly fine to mix a little fun with debt reduction. That’s what makes life worth living.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
Steve Rhode
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