It’s tax season again and while the thought of filing taxes causes anxiety for a lot of people, that doesn’t have to be the case. Especially when you learn you are going to get a refund from the IRS.
What should you do with your tax refund? Many personal finance experts are quick to suggest ways to spend your tax refund. Their suggestions run the gamut from pay down high interest rate debt, rebuild your emergency fund, boost your retirement savings, increase college savings for your kids, refinance your house, pay down your mortgage, or splurge a little on yourself. But if you are in the middle of a debt settlement program or are considering do it yourself debt settlement as a way to resolve your credit card and unsecured debt, you should save your tax refund for future settlements with your creditors.
If you are struggling with a financial crisis one of the things you can surely use is a cash infusion. Oftentimes, those who have had success with the debt settlement strategy were able to supplement their monthly savings with a chunk of money from someplace else. Having the ability to give your savings a big boost is pretty rare, so if you have the chance to do so, you should take it.
At the end of the day, a successful debt negotiation comes down to three things: (1) your timing in the debt collections process, (2) how much money you have to offer your creditors, and (3) how quickly you can come up with the funds. Even if you have negotiated a very low settlement with one of your creditors, if you don’t have the money saved up to pay them now, you won’t be able to settle the account and you’ll have to approach them again later when you’ve saved up more money.
For many people, a tax refund is one of the few chances they have to supplement their monthly savings, and shouldn’t let this opportunity pass them by. The sooner you can save up money for settlements with creditors, the sooner you’ll be able to settle the accounts and get your financial house in order. Another way to save yourself thousands of dollars is to learn how to negotiate credit card debt so you can employ the do it yourself debt negotiation method. Handling your own negotiations will greatly accelerate the completion of your debt settlement program because the thousands of dollars in fees you would have paid to a third party company, will instead go into your savings and build up your settlement funds.
