$5100

[wdwfan16]

There was a study done that showed people on average will spend on average 18% more every time when using a credit card than they would if they only paid in cash. McDonald's saw their in-store sales rise over 57% when they started allowing people to pay with a credit card.

Using cash has a psychological pain to it that using a credit card doesn't and people on average are far more frugal using cash only. Personally I would rather using that 18% we save and fly when we want and stay where we want and not worry about 'free' hotel stays or airline tickets.

I have also found that having cash has increased my buying power considerably. DP and I haggle all the time on high ticket items and have found that cash makes prices instantly decline.

So maybe you do not spend or think you do not spend more using a credit card, then good for you. That is how they come up with averages. There are those who spend a great deal more than 18% too and justify it because they "pay it off each month". They are folloing themseves on the deals they think they are getting.

When I order inside of McDonalds I use my CC. When I go drive thru I pay cash. Guess what. I order the same meal at both places. I get a 1% rebate when I go in the store.

 

[staley7580]

Good for you OP!!! We got a huge refund as well! It IS fun to do your taxes and see that little refund number go up and up. For me it is, anyhow. We had some major life changes this year. We had two babies, my husband lost about 30% of his income... Well, I guess those are the only two! but they were huge. So we got about 3500 more then we expected.. and about 5000 more then we ever have.

Like Patsy said.. how are you supposed to plan for things you dont expect? We havent gotten EIC since I was a single parent. I didnt think we would get it this year. There were other things I didnt think we would get credits for, but we did. We got WAY more then we paid in. By about 6 times.. I didnt think you could just get free money from the government throughout the year.

 

[mumom95]

Why do people assume that if someone gets a refund back they don't save as well?

I was wondering the same thing.

We get a large refund. I like it that way. Is it what the experts say we should do? No, but the experts also say I shouldn't have eaten the Krispy Kreme donut I had for breakfast, and I didn't listen to them either. We are in our mid 30's, are financially secure. Do we save over 50% of our monthly income like some Disers? No. But then again, my life's goal has never been to die richer than all my friends. We have a nice emergency fund, retirement account and college account. I use my large refund for our yearly vacations. I like it this way, I look forward to tax time every year, and if Uncle Sam has a little extra money throughout the year to work with because of me, well, I'm happy to be doing my part for my country

What I think is funny is that there is a person on this thread getting all bent out of shape because other people are getting a large refund, implying it's not fiscally responsible. The same poster also says that they wish they had the luxury of not being able to use an extra $40 a paycheck.

I'm not sure we should be taking financial advice from someone who is so financially strapped that they can't afford and extra $40 a month.

 

[tinkntraining]

Tiggerlover: Congrats on getting back your big refund! I hope you either blow it, save it or pay bills with it -- whatever works best for YOU, do it!!!! Forget what anyone else says. YOU know what's best for YOU.

I save all year round. I'm frugal (cheap sometimes), but I keep my nose to the grindstone, and pay all I can, when I can. Increasing the "rainy day fund" is a priority for me throughout the year. But I gotta admit, I love tax time. Getting one big check gives me all kinds of options -- a chance to splurge -- to enjoy it, without feeling guilty. Or, to pay of the kids' braces. Or to repair the roof. Or to pay down my mortgage. The point is, I'll keep doing it every year, too, because IT'S WHAT WORKS FOR ME!

People, it's 2010. Can't we just live and let live? Why do some people feel it's their job to "educate" strangers about withholding, and saving, and interest? Live your life, do your thing...if you want to give strangers financial advice, apply for a job as a financial consultant -- at least then you'd get paid for it!!

 

[tinkntraining]

i was wondering the same thing.

we get a large refund. I like it that way. Is it what the experts say we should do? No, but the experts also say i shouldn't have eaten the krispy kreme donut i had for breakfast, and i didn't listen to them either. We are in our mid 30's, are financially secure. Do we save over 50% of our monthly income like some disers? No. But then again, my life's goal has never been to die richer than all my friends. We have a nice emergency fund, retirement account and college account. I use my large refund for our yearly vacations. I like it this way, i look forward to tax time every year, and if uncle sam has a little extra money throughout the year to work with because of me, well, i'm happy to be doing my part for my country

what i think is funny is that there is a person on this thread getting all bent out of shape because other people are getting a large refund, implying it's not fiscally responsible. The same poster also says that they wish they had the luxury of not being able to use an extra $40 a paycheck.

I'm not sure we should be taking financial advice from someone who is so financially strapped that they can't afford and extra $40 a month.

gmta!

 

[ICF]

I too find it odd that McD saw increased sales.....do people really go and start buying extra food just because they charge it?

I think there is more to the increase in sales than JUST credit cards being used. I would be curious to know if MORE people ate there or something and would want to find the avg spend per consumer to see how that changed. I am going to order the same amount of food the 4 of us will eat on that day....no matter how I pay for it.

 

[Green Tea]

McD's sales likley did go way up; I don't dispute that. But a lot of the increase is folks using their debit card. So not all plastic sales are credit; some are undoubtedly moms like me who rarely have cash but use the check card for most things.

 

[Planogirl]

What's wrong with Turbotax?

Wow, so much bitterness on this thread! Another question, why do some people worry so much about what others do?

 

[DawnCt1]

Letting "Uncle Sam" have an INTEREST FREE LOAN of your money is not smart. You ARE NOT GETTING money from "Uncle Sam". He is letting you have your money back.

Be smart - adjust your withholding so that you get that $100 EVERY week as opposed to having to wait a year to get it back.

If you look at your tax return as a "savings plan" then set up an automatic investment plan with a mutual fund deducting the $100 every week so at least you get interest on the money.

I make sure that I get back as little as possible. A better case is to owe "Uncle Sam" at the end of the year. Then YOU GOT and INTEREST FREE LOAN from him!!!

ITA But I will bet you that $100 that someone will express their verbal outrage that you ruined their "gift" from Uncle Sam.

 

[testifyoncruises]

What's wrong with Turbotax?

Not a thing if you want to be Treasury Secretary.

IMHO, you are leaving money on the table using Turbotax, but most people do not want to pay a professional CPA to do their taxes.

 

[CathrynRose]

What state was it? (Kentucky? Kansas?) that wasn't able to give anyone their state tax refunds last year? Did they ever get it?

That's one really good reason to adjust your taxes so you get little to nothing back.

 

[DawnCt1]

I too find it odd that McD saw increased sales.....do people really go and start buying extra food just because they charge it?

I think there is more to the increase in sales than JUST credit cards being used. I would be curious to know if MORE people ate there or something and would want to find the avg spend per consumer to see how that changed. I am going to order the same amount of food the 4 of us will eat on that day....no matter how I pay for it.

I use my credit card for EVERYTHING. If they take it, I use it. I rarely carry cash. Its easier to pay it once a month. I don't like using my debit/checking account at the point of purchase and never do.

 

[ICF]

I use my credit card for EVERYTHING. If they take it, I use it. I rarely carry cash. Its easier to pay it once a month. I don't like using my debit/checking account at the point of purchase and never do.

me too, I charge most everything over $5.....the post in question I had been responding too had said that CC cause people that use them (like us) to pay 18% more than people that pay cash (or some such thing) and that people spend a lot more using a CC vs paying cash.

 

[testifyoncruises]

me too, I charge most everything over $5.....the post in question I had been responding too had said that CC cause people that use them (like us) to pay 18% more than people that pay cash (or some such thing) and that people spend a lot more using a CC vs paying cash.

No what I said was people who use credit cards on average spend 18% more than people who pay only in cash. Meaning they buy more things they like would not have bought if they only had cash.

From DaveRamsey.com

CardTrak, who gets their information from the credit card companies, reports 60% of people don't pay your credit cards off every month. Cambridge Consumer Credit Index found that 47% of balance holders only make the minimum payment. You aren't paying it off every month.You're also paying more. A study by Dunn and Bradstreet showed that the credit card user spends 12 to 18% more when using credit instead of cash. After McDonald's began taking credit cards, they found that people spent $5 to $7 more per sale. It hurts when you spend cash and therefore you spend less.
....
The big question is, What do millionaires do? They don't get rich with free hats, brownie points, or air miles. What do broke people do? They use credit cards. I rest my case.

 

[Tiggerlover91]

yikes....i had no idea this thread would reach 8 pages! I'm such a pot stirrer!

 

[Piecey]

Then again, we are disciplined enough to put our extra into a vacation fund, gift fund, etc during the year. Just because we have it doesn't mean it gets spent.

The rest of your post was all nice and understanding that people could have two different ways of thinking... then at the end you throw in an insult... or maybe you didn't mean it that way??

We save. I'm 22, DH is 28, and we have enough liquid cash in a savings account to pay our expenses for 18 months if DH lost his job. We have a vacation savings account. We have over $14k in the stock market. We have TSP, an IRA, we both have retirement, I have a 401k, etc...
Our son has a 529 college savings account already which we make monthly contributions to. We also no longer have my income since I stay home now, but we've continued to save and added the college savings plan even without my money.
I fail to see how we aren't "disciplined enough" to save money when I think we're doing VERY well for our age.

There was a study done that showed people on average will spend on average 18% more every time when using a credit card than they would if they only paid in cash. McDonald's saw their in-store sales rise over 57% when they started allowing people to pay with a credit card.

I can believe their sales rose and believe it has a lot to do with people who use credit irresponsibly. My friend, a few years ago, got her first credit card. The next month she calls me crying because she is over her limit, her interest rate went up, etc.. because she just went crazy swiping it everywhere.
Not everyone is like that!

My husband and I pay our cards off monthly- but I use them for almost everything we buy to get the points. We haven't paid a cent in interest... and we cash the points out for gift cards or Disney Rewards.
I can believe that is the case for some people, but it is NOT the case for everyone.

I too find it odd that McD saw increased sales.....do people really go and start buying extra food just because they charge it?

I think it has more to do with the fact that people who didn't have cash could now charge their meal... so instead of going home and cooking they'd just swing by McD's.

Not a thing if you want to be Treasury Secretary.

....and I fail to see what is wrong with being a Treasury Secretary? Government jobs are highly sought after.
My husband works for the Treasury- but he's not a secretary.

 

[ICF]

From DaveRamsey.com

...don't even get me started.

 

[Kit'smommy]

The rest of your post was all nice and understanding that people could have two different ways of thinking... then at the end you throw in an insult... or maybe you didn't mean it that way??

Several of the earlier posts suggested that the small amount per month would just get absorbed by regular spending when that is not alway the case.

If that is the only way a person can save, it is better than not saving at all, but I personally think it is absurd to loan extra money to the government that you have to wait to get back.

By the way, I use Turbo Tax and really like it. The various software products I used in public accounting really were not much different. I doubt the average person with a relatively simple return is going to benefit that much by using a CPA.

 

[DawnCt1]

No what I said was people who use credit cards on average spend 18% more than people who pay only in cash. Meaning they buy more things they like would not have bought if they only had cash.

From DaveRamsey.com

We tend to be rather disciplined. I look at my card as cash out of my account rather than "credit".

 

[Kit'smommy]

Quote:

Definitely better! $120 a week - I would find a way to spend it. Throw it as extra on student loans, buy my husband new shoes, etc.

We put a huge chunk of money each month into savings - about 50% of my DH's pay. And then I put a good chunk of MY pay into my IRA. We are very disciplined about it.

But the extra $120 per week just gets blown away? How are these statements not contradictory? Why not just put the extra $480 a month savings?