Many Americans look forward to their tax refunds that start coming in during the first quarter of each year, depending on when they were filed. Tax refund checks are the most significant chunk of cash they get all year for many Americans.
So far, the IRS has issued 4.46 million refunds this year, and this changes daily. The average amount is about $2,306. This will ebb and flow as more tax filings are processed and checks are issued.
So what do you do with the money?
Every person will consider their options depending on their financial situation when they receive their tax money.
You will too.
First, begin by assessing what your short-term cash needs are.
Is it time to pay off a short-term pawn loan amount?
Is it time to take the money you receive and set some of it aside to make repairs on your car or home?
Is it time to get caught up on those payments you got a bit behind on over the holidays so that you don’t have to pay fees and higher interest rates?
Are the credit cards adding up, and the money you received can make a sizeable dent in that balance?
In 2021 you spend 2080 hours working your full-time position. You had a lot of hours to dream about what your tax refund might look like and how much it would be. Each time you received the bi-weekly paycheck, you saw how much money was taken out for taxes and sighed.
The money you receive after you submit your tax filing isn’t free, and you didn’t like paying income taxes, and you also knew it was like a forced savings account you could draw on in the first quarter of 2022.
This should be the happy money you think. After receiving it, you can spend it at will and however you want.
Financial well-being has always been a short and long-term goal of yours. Credit card debt and high-interest card balances have been hard to avoid. You begin to think maybe you could use the money you receive to get rid of some of the credit cards by paying them in full.
You look at the balances on each credit card and determine that if you paid off the high-interest card balances with the high interest, the money you would save in the long run would be more money than you would earn by putting your tax money in savings.
You would be better off paying down some of the cards.
You decide to pull a credit report to see any other outstanding accounts with high interest. This makes sense as you plan. You find that there isn’t too much concern other than the fees and that the interest rate generates little change in paying down the principle on the accounts.
In the long term, you want to be debt-free, but each of your paychecks goes to everyday living expenses and monthly payments. There is little money left to set aside for paying down the cards or investing.
Pawnshops May Be An Option To Get Extra Cash So You Can Start Paying Cards Off
A few months ago, you were reviewing your finances and thought you might want to invest so you could meet your long-term financial goals. You visited Idaho Pawn and Gold and talked to the pawnbroker about gold, silver, and investing in precious metals.
You also talked to the pawnbroker about possibly consolidating your debts and selling or taking out a short-term pawn loan to pay off credit cards. You took the information you gathered during the visit and went home on a voyage of discovery.
A Discovery Of Expendable Items to Get the Money You Need
You looked through your drawers, the big and little boxes on the top shelf of your closet, in your safe, in the jewelry box you hadn’t looked in in a very long time.
You found gold coins, bullion, old gold jewelry, and even a few Morgan Silver Dollars.
You wondered if these items would give you the funds you needed at tax return time to add to any money you get back from taxes to pay down some debt and invest in other things. Your saving account was empty, and these luxury items were like savings you hadn’t considered before.
You thought maybe it might be wise to put an emergency savings fund together as well. So much to consider when someone is hit with unexpected expenses, and perhaps setting some money aside would be brilliant.
You thought you could always get a short-term collateral loan if you needed it despite unexpected expenses, is the pawnshop only needs a state-issued ID with a mailing address.
There was no need to share credit history, the amount of credit card debt you have, what’s in your bank account, savings accounts, if you have a valid checking account, how much your income is, anything about previous loans or those loan amounts, specific details about where you work, or anything else at a pawnshop.
The process with the pawnbroker didn’t include approval criteria, and it is confidential and discreet.
You decided to make a chart of your financial situation.
Amounts, Owed Payments, Solutions
Bank of America $3500.00, $200.00
Chase $4550.00, $219.00
House Payment $250,000.00, $2300.00
Auto Loan amounts $25,000.00, $414.65
Save $ 50.00 monthly payment automatically
Household Bills $890.00 monthly payment
Emergency fund $ 75.00 monthly payment
Investments $ 100.00 monthly payment
You realized that by writing things down, you would need to decrease your credit card balances by paying them off, which could be done by consolidating your credit card debt.
By paying things off, you would help raise your credit history because you wouldn’t have such a high income to debt ratio, and without having to pay the monthly payment of $419.00, you could reinvest that funds into building your investments.
You read that repaying debt sooner puts you on a better track for reaching your long-term financial goals.
Paying off credit cards will simplify finances, help you get lower interests rates in the future, boost credit, and help you defer the money to other areas like investments.
A Plan that Makes the Most Sense When Your Tax Money Comes In
You contacted the credit card companies, and your auto finance company gave them a valid social security number and got the amount needed to pay off these loan balances.
You compared the specific details of the amount of interest charged on each. If you paid off the credit card balances, you would save a great deal.
You made a list of the valuable items you found during your earlier discovery journey, like the gold bullion gold jewelry, and researched their value. You cleaned everything up and gathered all of the supporting documents you had been keeping forever.
You called Idaho Pawn and Gold for a quick estimate after filling out the online contact form found on their website.
You went to the post office and picked up your money, our happy money in the form of an IRS check, and cashed the check leaving 10 percent of it in your checking account for fun spending.
You made an appointment to sit down with the pawnbroker at Idaho Pawn and Gold.
The pawnbroker knew you by name from talking with you earlier, which made you feel comfortable. He looked at the items you took with you to the store, and he appraised all of the things giving you a value the pawnshop could offer for a pawn loan as well as buy outright.
To Sell Outright or Pawn?
There were a few items that you felt guilty about liquidating because your grandfather had given them to you years ago. He would understand that today the cost of living is high, and liquidating may be a good option, but you still felt terrible.
You set those personal items aside and thought these you would use to secure a collateral loan to pay off the credit card debt you are making monthly payments on each month.
You sold the other items outright. With your income tax money, the quick cash you received from selling the valuable items, and the collateral loan, you totaled up enough money to pay off both credit cards and even had a little money aside to set aside in an emergency fund and to invest.
You were surprised how quickly you could simplify your finances, still have some extra cash, and get well on your way toward investing in our long-term goals. These goals don’t include credit usage, running a hard credit inquiry, or worrying if a bank or financial institution is federally insured.
Idaho Pawn and Gold
Idaho Pawn and Gold is a full-service pawnshop with two locations. One location is in Meridian, Idaho and the other is in Nampa, Idaho.
Both stores work with individual borrowers to provide short-term collateral loans, gold buying and selling services, and more.
The pawnshop isn’t concerned with your credit history, so they won’t be making a hard credit inquiry that will affect your credit rating should you need a credit review in the future. As far as the fee for borrowing the funds, the actual rate depends on what the pawnshop charges and isn’t based on a soft credit inquiry or a hard credit inquiry or anything else.
Idaho Pawn and Gold offers pawn term arrangements as low as 35% APR Interest Rate on $20,000+ Pawns.
The loan repayment is based on a 1, 2, or 3 month repayment period with no maximum repayment period.
The pawnbrokers will go over the loan term explain the loan rate in an easy-to-understand conversation.
Idaho Pawn and Gold considers all luxury items like Rolex, Luis Vuitton Handbags, name brand power tools, musical instruments, heavy equipment, and vintage autos. Idaho Pawn and Gold have pawnbrokers who will assist you with emergency funds should a problematic, unexpected situation arise.
The pawnshop has large retail storefronts at both stores and an online store. There are items like gold and silver jewelry available for purchase and can be added to your investment portfolio.
Stop in today and spend that happy money!