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SALT LAKE CITY -- Debt counselors will say, of course, that paying off debt is a responsible way to use your tax refund.
AAA Fair Credit Foundation Director of Counseling Services Will Vandertoolen said, "If you don't pay it toward debt, your debt will consume additional interest in the year to come, or years to come."
It's not necessarily a need, but in your own mind it has become a need. You have to have this hot ticket item.
–Will Vandertoolen
But paying off debt may not always be the best choice. Vandertoolen says if someone knows they have a large expense coming up, it may be best to apply the refund to that.
"If you're maintaining the debt-load well (and if) you have some expenses that you know will be coming up, it might be a good idea to hang on to that cash."
Vandertoolen says too many of us justify the items we buy with our refunds, even if we don't really need them. He says retailers pressure customers into believing that if they finally have enough money to buy a high-priced item, like a new TV or a vacation, they have to buy them immediately because "these deals won't last." These "once in a lifetime" deals come every year, but Vandertoolen says these sales tactics are a lot more effective than people may think.
"It's not necessarily a need, but in your own mind it has become a need. You have to have this hot ticket item or you have to complete this home repair," he explained.
He believes the best way to determine if the item you want to buy is a need or just a want that feels like a need, is to ask yourself one question.
"Am I making this decision as an emotional decision or as a financial decision? If I'm making this decision emotionally because I want to go and spend time with the family on a vacation, then it's probably not a need."
E-mail: pnelson@ksl.com
