Hi Reader!

Are you getting a tax refund this year? Refunds can feel like a gift from above (pennies from heaven!), and they generate a lot of excitement. But without a little planning, that excitement can work against you.

A windfall, whether it is a refund, a bonus, or a gift, has a way of sparking big dreams. We start mentally spending it the moment we hear it's coming: pay down debt, build up savings, finally make that purchase we've been putting off, book that vacation. And honestly? That mental spending feels great.

Here's why: spending money releases dopamine, a neurotransmitter that activates the brain's pleasure and reward centers. In fact, the anticipation of buying something can trigger even more dopamine than the actual purchase. So we keep mentally spending again and again and again. This new money can be anything and so it becomes everything.

The problem? By the time the check arrives, we may have emotionally spent far more than we actually have. That gap between expectation and reality can be really disheartening. And if we've already acted on those plans, we may find ourselves in a tough spot financially.

Here's a simple way to get ahead of it:

Before the money arrives, grab a piece of paper and write down everything you're thinking about putting it toward. Create a wish list with estimated amounts. Then take your expected windfall and divide it up across those items. See how it feels. Adjust as needed. You'll naturally land on a plan that feels right.

Think of it as shopping before you shop. This mini spending plan is a great exercise any time new money comes your way. It lets you spend intentionally and guilt-free.

Want to talk through how to make the most of your refund? Schedule a FREE Penny for Your Thoughts Q&A Call​

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Remember, small change adds up. Step by step and penny by penny, we’re building a better life. Have a shiny day!

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Laura

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