AH WISCONSIN! The people… the places… the weather. We do ALL the seasons, buddy. And navigating those extremes makes folks from the Badger State a hearty bunch. (Shorts in March because it broke 40 degrees? Don’t mind if I do.)
Ok, stop us if you’re heard this one: Wisconsin winter temps go way-way down and your utility bills go WAY-WAY UP, pretty much at the worst time of the year to dish out a whole lot of extra cash. (As if there’s a great time of the year for it…) Sooooooo you decide to skip a payment (or three) knowing that the Public Service Commission prevents things like heat and electricity from being shut off in the winter.
It’s ok, right? You’ll catch up on it with your tax refund.
Hey friend, no shade, we’ve been there. Maybe more than once.
In fact, a lot of us get stuck in that cycle year after year.
1. The bills go up.
2. We don’t have enough saved to pay them.
3. We spend our whole tax refund catching up.
4. And then start the whole cycle again.
Wouldn’t you LOVE to break that habit? You can, and it’s easier than you think.
(We’re not saying it’s easy, we’re just saying it’s not impossible.)
We’ve got some tips for you to try.
Tip #1 – Save some of your refund and keep adding to it all year long.
This one’s a classic, but it’s never a bad idea. Even pre-pandemic, a majority of Americans had less than $1000 set aside for an emergency. According to a recent report from CNBC, 61% of Americans say they will have exhausted any emergency savings by the end of 2020 with the long, slow climb to recover our economy just beginning.
And that all sounds bad, we’re not gonna lie, but you can still baby-step your savings goals.
When you get your tax refund, take some – let’s say $100 – and set it aside in a savings account.
You’re probably thinking “$100? That’s a LOT!”. Here’s where we’re asking you to trick yourself a little bit, but trust us. Odds are, until you had your taxes filed, you didn’t know that $100 existed, right? Your refund could have EASILY been $100 less. It will take some willpower but PRETEND it was $100 less and then squirrel it away.
Tip #2 – Check (and maybe update) your withholding with your employer.
Ok, yeah, we LOOOOOVE the feeling of know that big, fat tax refund is on its way, no doubt, and it feels great right up until we spend it all catching up on our bills and maybe splurging a little if we can. (Yes, I’ll have the chips with guacamole AND the mozzarella sticks please...) But wouldn’t it feel even better if you could keep your bills on track and treat yourself all year long? (Guacamole is the good kind of fat, enjoy!)
If you’re getting a big refund every year, you might be overpaying on your income tax. You’re awesome and generous, but do you REALLY want to send the IRS a whole wad of cash, basically a no-interest loan that comes out of your pocket, only to have to ask them to send it back?
A lot of us took the advice of our Mom, or Dad, or super-smart Auntie who was an Accountant, when we filled out our first W-4 when we got our first job and maybe haven’t thought about it since. But when big life changes happen – we get married, we have kids, our kids grow up (too fast) , etc. - it pays to review our withholding and see if that needs to change too. After all, less withholding from paycheck to paycheck means more money in your pocket and more bills getting paid on time, every time.
(Just a note here: we’re not tax experts so you should definitely talk to one about the best plan for you and your family before you start switching things up.)
Tip #3 – See if your utility company has a budget plan.
One of the great things about living here, in the upper Midwest, is that we have ALL OF the seasons (sometimes in the same week...) and listen, our utility providers get it. They know that our energy use is going to have peaks and valleys every year and that we don’t suddenly have an extra $300 just because it decided to snow before Halloween.
That’s why many utilities offer budget plans for their customers. By estimating the total cost for a year, and then dividing it out over all twelve months, your bill can be low and manageable year-round and you won’t have to stress when there’s a cold snap.
If you're tired of the utility-bill roller coaster, check with your provider today to see if they offer a budget plan. If they don’t, let them know that you and plenty of customers like you would love to see one and ask how you can leave your feedback to get something rolling.
(Hey, we should also mention that normally you’ll need to be up-to-date or have a payment plan to get on a budget plan with your utility company. If that’s the case and you can’t quite make that one lump sum payment to get you there, talk to our AMAZING Lending folks to see if a Flexline Loan would be right for you. With payments as low as $15 a month, you could be paid up and back on track in no time!)
The bottom line here is that there are a TON of ways to save smarter and have the money you need, when you need it, you just need to find one (or more) that works for you and your budget and flex that willpower, so it keeps working, tax season after tax season.