There are similarities between the two—both pay interest, have fixed balances, and are pretty easy to deposit money into or withdraw it out.  Either account type could accomplish your savings goals.

But there are significant differences between them, and those differences could help you decide when one is more appropriate as a savings vehicle than the other.

Money Market Accounts VS Savings Accounts

Money Market Accounts

Money market accounts are managed funds—much like mutual funds—where the object is to provide a return on investment while also maintaining safety of principal.

They do this by investing in very safe and very liquid securities, which themselves pay interest but also maintain constant values.  In order to do this, money markets invest in short-term securities, usually less than one year in maturity, which minimizes price changes.  United States Treasury bills are typically a very large component of money markets.

Money market accounts became very popular in during the 1970s due to wide interest rate fluctuations and double digit interest rates.  Because the funds invest in short-term interest bearing securities on a constant basis, during rising interest rate environments they are able to achieve higher interest rates much more quickly than more conservative savings instruments, like savings accounts or certificates of deposit.

[Related: What is a Certificate of Deposit?]

Money market accounts that are offered by banks (money market DEPOSIT accounts, or MMDA’s) are FDIC insured, but many are also offered by mutual funds and investment brokerage firms that aren’t covered by FDIC. There is, therefore, some risk of loss as a result.

In addition, many money market funds have minimum start-up or minimum balance requirements.  Some may also charge fees if your account falls below the minimum balance requirement, or if you have over a certain number of transactions.

Savings accounts

Savings accounts are perhaps the simplest form of savings instrument.

You can open one at your local bank—which means you can also access the money in person.  These days you can also easily open an online savings account as well.  As bank instruments, they’re also fully insured by the FDIC.

On the downside, savings accounts typically pay low rates of interest.

They represent passive savings where the principal focus is safety rather than return.  They’re also somewhat more difficult to access than checking accounts because either you don’t have check writing privileges, or you’re limited to a very small number of such transactions before fees will be incurred.

The best ways to use either

On the surface, money market accounts and savings accounts may seem to compete with one another for the depositor’s dollars, but that isn’t nearly true.  Each has a place in your finances, but under different circumstances and for different purposes.

When to use money market accounts:

• In rising interest rate environments—money markets adjust quicker
• In conjunction with investment accounts for un-invested funds
• As a place to park your money short-term

When to use savings accounts:

• For a starter account, especially for kids—they have no minimum balance
• For dedicated accounts where you’ll use the money quickly
• For accounts that require quick and easy physical access to your money
• When you want complete safety of principal (FDIC insurance coverage)
• As emergency funds

You can even blend the two with a tiered savings plan.

For example, you could have money from your paycheck deposited into your savings account until you have enough that you can transfer it to your money market account.  Having both types of account can give you much more flexibility than if you just have one.

What are some of the ways you use money market and savings accounts?

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Money Market Account VS Savings Account – What’s the Difference?

I’ve been in the league with these particular guys now for over ten years. It’s not a money league, but we’re real competitive nonetheless (we’ve been playing against each other for over a decade now).

I gotta say I’m stoked! Real baseball starts soon (go Mets!!) and I love following baseball alongside my fantasy league.

As I was going through all of my work for the draft I realized that fantasy baseball is a lot like personal finance. We could probably learn a thing or two about personal finance from fantasy baseball.

Without further ado, here are five ways fantasy baseball is like personal finance:

1. Putting in the Research

No successful fantasy baseball can survive without good research.

There are 30 baseball teams and each has a 40 man roster. In my league, we draft 23 players. You have to go through a lot of information ranking players, doing research on who will be playing and who will be good. There’s injuries, position battles, prospects…if you don’t keep up and do your research you won’t rise to the top!

***Personal Finance*** – With PF research is also integral to success.

You need to know where your money is going and keep up with funds and companies you may be invested in. What is your credit score? What is the interest rate? Are there expense fees?

These are just a few questions we try to answer when doing research for our personal finances.

2. There are Tons of Experts Out There

There are so many sites out there that have “experts” telling you who to draft and who will be the next big thing. Who do you listen to?

Brandon Funston? Mathew Berry? Pete Becker? Brendan Roberts?

Truth is none of them can tell you for sure what will happen in the baseball season.

They work with the same statistics and basically give you their opinion on what will happen and what would be the best players to pick. A player can get injured or be great and then flop. Sometimes there’s no rhyme or reason behind a player’s performance.

Best thing to do?

Find a few of these experts who tend to have the same ideas as you. Listen to them but follow your gut with their advice and come up with an approach that’s best for you.

***Personal Finance*** – Please, who can count the number of experts in the personal finance realm?

Do I listen to Jean Chatzky? Dave Ramsey? Robert Kiyosaki? Jim Cramer? Benjamin Graham?

Again, they all work with known information but each has their own spin on things.

Find the people whose approach you can relate to and use that to create your own approach to personal finance. And remember, just because you see someone on TV it doesn’t mean they are an expert and really know more than you.

3. Look for Value

There are those in baseball that everyone knows are great. Jacob DeGromm will miss bats. Mike Trout will make pitchers regret their pitches.

But the way to get ahead in fantasy baseball is to find the real values, guys who aren’t superstars yet but whose stats show they might be. Or those players who were great but got injured so people don’t value them as much.

I drafted Preston Wilson his first year in Colorado somewhere in round ten in my league years ago. He ended up being first round value and helped me to first place (something like 150 RBI’s). It’s about finding those fundamentally sound players who are about to take their game to the next level.

***Personal Finance*** – Value is important in personal finance as well.  In stocks, you may be interested in those companies that have been consistently growing and they are about to take that next leap. In being frugal, it’s about getting the most value you can for your dollar.

You don’t want to pay for hype. It’s about finding value.

4. It’s Easier When You’re Around Like Minded People

I mention fantasy baseball to some people and they look at me like I have three heads.  Or they just roll their eyes like my wife (luv you hon).

But when I get around other people who are as psyched about fantasy as I am…we can have a long in-depth discussion on why certain players are bound to do well or why we hate certain players because they cost us a championship. Friends who play fantasy baseball keep me excited about it. I try to share any new research or info I have with them and they do the same in return.

***Personal Finance*** – It can be tough keeping a reign on your personal finances when your friends, family, and neighbors are the “Joneses.”

Who can keep up with the new cars, big houses, and name-brand items?

When your friends have the same ideas about PF as you do it’s easier to keep things in check.  You have people you can talk to and discuss issues and ideas with.  In the blogging world, we have places like PT Money, Cash Money Life, Moolanomy, Good Financial Cents, WiseBread, and so many others where we can go to share ideas about personal finance.

5. There’s No One Approach to Winning

Do I draft for speed? Do I draft more hitting? Pitching? Do I go with steady, consistent players or try to draft the hot prospects? Do I draft Mike Trout or Kershaw first?

Just as there are many experts there are many ways to win a league.  In fact, you may start off with one strategy and end up following another. Your strategy may change based on the other people in your league. If everyone values hitting more then maybe it’s worth it to value pitchers higher.

***Personal Finance*** – Stocks, bonds, savings, earning more, mutual funds, ETF’s, real estate, 401(k)‘s, IRA (traditional and Roth)…

There’s no one way to get ahead.

Your approach may combine all of these or maybe only include a few. Everyone’s idea of personal finance is a little different. There’s so many ways and ideas and you have to find what works best for you. Odds are the strategy you have now will change over time.

Finally

I could keep going, but I need to go research some guys in AAA that have a shot at getting called up this year…

But you can easily see how fantasy baseball and personal finance are very similar!

Can you think of any more?

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Five Ways Fantasy Baseball is Like Personal Finance

Your best option is to stay organized year round so that you aren’t scrambling at tax time. There’s not much worse than trying to find a tax document right before you file your taxes or head to the accountant.

Whether you are trying to get organized at the last minute, or whether you are looking to stay on top of your taxes the whole year, there are tools to help you.

Read on and you’ll see how easy it can be to keep track of your tax documents throughout the year. Looking for misplaced tax docs is not a stress you need to have!

Here are 5 Great Tools to Help You Organize Your Taxes

Catch-all Folder

This first tool is low-tech, but it’s a time-tested way to keep all of your tax documents properly organized.

This tool is a simple manilla folder that you keep someplace easily accessed (yes, the physical kind that can give you one heck of a paper cut if you’re unlucky). Anytime you get a tax-related document, you simply place it in the folder. As the year moves forward, everything related to your taxes, from business receipts to 1098 forms from your mortgage lender, goes into the folder. No need to hunt everything down when it’s time to do your taxes because everything is right there.

You can also create a digital version of the catch-all folder.

Use your scanner to make copies of your paperwork and then save them in a file on your computer. This is great if you try to keep a paperless office, or if you e-file. All of that information will need to be scanned anyway for the e-filing, so it makes sense to go ahead and digitize it, to begin with. Encrypt the folder so that others can’t get into it, and be sure to back the folder up to an external disk and/or to the cloud, just in case.

The catch-all folder works especially well if you have a professional prepare your taxes. Everything is there, and it just takes a few minutes to sort it out. If you aren’t kind enough to sort out the documents for your accountant, at least the catch-all folder makes it a simple matter to just march into the office with everything you need for your tax return.

Shoeboxed

Shoeboxed is a handy storage app to help you organize your documents. You can take pictures of receipts and other documents, and then easily categorize everything so that you can find it during tax time.

Another great feature of Shoeboxed is the fact that you can use it to track your mileage. If you drive in the name of business or charity, you can deduct your mileage on your taxes. Use Shoeboxed to track your mileage so that it’s easy to keep up with the way you drive your car in a tax-deductible manner.

Shoeboxed also helps you create expense reports and other easy-to-read documentation. Plus, it’s fully searchable, so you can pinpoint something if you need to.

Check out Shoeboxed

Evernote

One of the most useful apps out there is Evernote. (I love Evernote, BTW!)

With Evernote, you can organize just about everything that has to do with taxes. You can snap images of your receipts and other documents, and easily store them. Not only that, but you can also add notes to your images. If you plan to deduct the portion of the cost of a business dinner, you can create a quick note to go with the receipt, describing who you met with, and what you talked about. It’s a perfect way to stay on top of your business expenses, and document everything that happens.

Evernote also helps you by allowing you to highlight items and search your saved information. You can also use Evernote to annotate information so that you can go back to it later. This can be a good way to make note of relevant portions of the tax code if you need to refer back to something later.

You can also group notebooks under one umbrella. This lets you create different notebooks for different tax needs, like personal and business.

Another way to use Evernote is to keep a running list of all tax documents you need. It can be tricky keeping track of every form you need. Create a note titled “Tax Documents.” Every time you receive a new tax document or download one, write the name of the document in your Evernote page. If it’s a digital document then put the URL for the page you need in your Evernote page. This is a helpful way to make sure you have everything you need to cover your tax filing!

Dropbox

If you need to share documents with your accountant or others, or if you are just hoping to move your digital catch-all folder easily from one place to another, Dropbox can be a great tool.

Keep track of all of your documentation in digital format using Dropbox. At the very least, Dropbox can serve as an excellent backup for your documents. Plus, you can access Dropbox from just about anywhere, even your phone. Create a folder in Dropbox, and then you can immediately take pictures of receipts with your phone and use the app to add the image to your tax folder on Dropbox. This is a good way to sync up your efforts, and allow you to store tax-related receipts without the need to manage paper.

Check out Dropbox (and get 500mb extra space)

Freshbooks

If you have your own business, one of the best tools for organizing your billing systems and making sure everything is squared away at tax time is Freshbooks. You can use this great tool to help you keep track of what you’ve been paid, and even what you’ve spent. If you have employees you can manage billed hours and other items.

Other payroll and accounting software that can help you stay organized year-round, including for tax time, include Zen Payroll, Quickbooks, and Xero. These types of applications can be a big help come tax time — as long as you use them throughout the year to stay organized.

Finally

You might be surprised at how easy it can be to organize your taxes, no matter the time of year. It doesn’t make it any more comforting to pay your taxes, but at least it reduces some of the stress involved in the preparation process.

What tools do you use to organize your taxes?

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Tools to Help Organize Your Taxes

This is a vicious cycle that encourages you to feel bad about yourself, and feel as though you’ll never get out of your rut.

Whether you are setting goals for your finances, or whether you are attempting to substantially improve your life, the yearly attempt (and subsequent failure) associated with resolutions can be frustrating.

If you’re ready to break the cycle, it helps to understand why you fail, and what you can do to create success in your life.

Here are 5 Reasons Goals Fail — and What You Can Do to Overcome the Pitfalls of Resolution-Setting and Succeed This Year:

1. Your Goal Ignores Reality

Too often, we have high-flown ideas of what we can become with just the right goal.

Unfortunately, this often leads to setting unrealistic goals.

While it would be great to pay off $35,000 in debt this year, the reality is that you aren’t likely to accomplish that goal if you make $40,000 a year.  You’re going to need to make major sacrifices in terms of what you spend on, and you’re going to have to come up with ways to make more money.

The same is true of losing weight, going back to school, or any number of goals that you might set.

Your goals need to be grounded in the reality of where you are right now and what you can reasonably hope to accomplish by the end of the year.  Honestly evaluate the situation, and figure out what you can actually do.  You can still set stretch goals that require you to push yourself a little bit, but you still need to be realistic.

Your resolutions need to be achievable.

Without achievable goals, you eventually give up when you realize the futility of your efforts.  You don’t want that to happen, so create realistic goals, and set realistic benchmarks that you can use to measure progress throughout the year.  You’ll be more likely to stay motivated to reach your goal.

2. Your Goal Focuses on a Process, Rather than a Result

In the past, my fitness goals have included things like, “swim for 30 minutes three times a week” or “kickbox for 20 minutes a day.”  While those are specific goals that are, in fact, achievable, they focus on a process instead of a result.

What if I don’t feel like kickboxing today?  What if my son is sick and I have to stay home instead of driving to the pool?

It’s easy to be defeated by the process, whether I stop swimming after 15 minutes, I only go twice a week, or I don’t go at all.  The same is true of money goals or any other goals.

If you focus too much on some sort of process that you have to complete to be successful, you are less likely to follow through with your resolution for a sustained period of time.

Instead of focusing on the process, focus on the end result.

What result are you trying to achieve?  Maybe I want to reduce my waist size by three inches or lose 10 pounds.  That result doesn’t rely on a specific process.  Maybe I change my eating habits so that I have less junk food in my diet.  Or, instead of getting hung up on whether or not I made it to the pool, I ride the stationary bike if I can’t get out of the house.

When you focus on a result, and what it takes to achieved that desired objective, you are more likely to stick with your resolutions.  You can substitute different actions and behaviors that can offer the same result over time.

This works with money, as well.

Instead of saying that you want to put $458.33 each month into your retirement account, you can say that you want to be in a position to max out your IRA by the end of the year.  This doesn’t require that you put $458.33 each month without fail from the beginning; it means that you build up to that over the course of the year.  At the end of the year, you’ll have a result: You’ll be set up to max out your IRA.  However, you do this by making gradual changes, either spending less or earning more (or doing both) and gradually increasing what you set aside.

Focus on the end result, and break it down so that you are looking at the big picture, rather fretting about the process.

3. Your Goals are Too Vague

One of the main pieces of advice that goal-setting gurus offer is that you should be specific.

If your goal is to “get healthy” or “save money,” chances are that you are going to fail at some point.

What, specifically, would make you healthier?  Do you want to bring your cholesterol down to a certain (realistic) level?  Would you like to increase your lean muscle mass by a specific amount?  What are you saving money for?  Do you want to save up $5,000 for a family vacation?  Are you planning to save up $15,000 for a down payment on a house?

Really think about what you want to accomplish with your goals.  Be specific.

Without some sort of specific goal, you have no way of knowing how much progress you have made, or how to tell when you’ve accomplished your objective.  Don’t forget, though, that you do want to keep the overall result in mind.  If you haven’t quite reached the exact and specific goal you have set, but you are still in line with the general result you want by the end of the year, that’s still a win.  You can keep working on it moving forward.

Set realistically specific goals, and make sure to break your goals down into smaller, bite-sized chunks that can be digested by you as you move forward.  That way, you can measure your progress along the way and stay excited about what you’ve achieved.  Being able to see your progress can create good feelings that encourage you to do even more to reach your goals in the future.

4. You Get Hung Up on Time Limits for Your Goals

One of the big reasons that your New Year’s resolutions are likely to fail is that you get too hung up on time limits.

While a brand new year is a great time for reflection, and a good time to set goals, the reality is that you don’t have to limit yourself to a year to reach your goals.  The idea behind setting goals is to make a true improvement in your life, not create some mad dash to a finish line.

If you get hung up on time limits for the accomplishment of your goals, you are more likely to make sweeping changes that last for only a short time before you revert.

In order for goals to truly improve your life, you have to be able to assimilate them into your lifestyle.  Even if your goal is to run a half-marathon in a certain period of time, the reality is that, as you work toward achieving that goal, you make changes in your life that are likely to “stick,” as long as you approach it as a long-term journey, rather than something you have to accomplish by a certain date.

Once you achieve a goal like that, you can tweak it for the next goal.

Your goal-setting should be more about improving your life so that you create long-term habits, rather than encouraging you to do something and then stop once the goal is reached.  Don’t get hung up on having something done by the end of the year.  Instead, focus on the result, and work toward it consistently.  It might take you two years to save up your desired down payment for a home, but that’s ok.

And, once you do reach your specific goal, make sure you have another goal to replace it with and take advantage of the good habits you have been building up.

Once you have enough for a down payment, you can set a new goal to build up your emergency fund, contribute to a retirement account, or set up a college fund for your children.

The idea is to keep improving, so you want to build on your successes for the next big goal.

5. You Set Too Many Goals

One of the biggest reasons that you fail at your goals is that you set too many.

Just as you aren’t likely to see solid results from multi-tasking, you are unlikely to see the results you want if you set too many goals at once.

This ties into number four.  Instead of setting a whole bunch of goals, pick one or two major goals to be working toward at a time.  Once you have achieved one of your goals, have something else to be working toward.  You should be focusing on bigger goals that can be broken down into manageable and measurable steps.  That way, you are actually improving your life and creating habits that result in long-term life success and satisfaction.

Don’t overwhelm yourself with all of the things you should be doing.

Instead, think of the most important one or two things you want to accomplish first, and then create plans to tackle those items.  Then, move on to a new goal.  Don’t limit yourself by time, either.  If you finish a goal in August, start working on a new goal — even though it isn’t a new year.  View it as a journey, and you’ll be more likely to make steady progress.

Here’s what Leo Babauta, author of the popular blog zenhabits.net says about forming one habit at a time:

Habit change is difficult, even with just one habit. If you do more than one habit at a time, you’re setting yourself up for failure. Keep it simple, allow yourself to focus, and give yourself the best chance for success. Btw, this is why New Year’s resolutions often fail — people try to tackle more than one change at a time.

Other Tips for Succeeding with Your Goals

As you work on overcoming the stumbling blocks often associated with goal setting, there are a few other tips to keep in mind.  Staying motivated can be difficult, even if you can see the positive changes and progress that you are making in your life.

Here are some other strategies you can employ to help you succeed at your goals:

• Make it public: Sharing your goal with others can create an incentive to succeed.  It adds a layer of accountability to your efforts.  Even if you just share it with two or three people who can be your “accountability buddies” and check up on you from time to time, the fact that you know that others are watching to see your progress can keep you motivated.
• Join a group: It can help to join a community with similar goals.  You can receive support and encouragement from those who are taking the journey with you.  It can also be a good way to get insight into tricks and tips that can help you with your specific goal.  Having that support system can keep you motivated, even during the toughest of times.
• Put your money where your mouth is: Make a bet.  Studies conducted by the founders of the goal-setting web site Stickk.com found that when money is on the line, people were more likely to stick with their goals.  If you have a financial consequence associated with your failure, you are more likely to succeed, if just to avoid the financial hit you’ll take.  Of course, this is counterproductive if you can’t afford the consequence.  It should be something that’s painful, but not devastating to you.
• Work with someone: This is similar to making it public and joining a group.  Find a buddy who has the same goal as you.  This works especially well if you have a significant other or a family.  You can all work together, encouraging each other.  And when you reach your joint goal, you can all celebrate together.  Any journey is more fun and fulfilling when you have others to come with you, and celebrate with you.

Final Word On Making Your Goals Succeed

There’s no reason to let goal-setting get you down.   Change the way you approach your resolutions, and there is a good chance that you will see more success this year — and in the years to come.

Where have you failed at goals?  Where have you succeeded?  Share your stories in the comments!

Bonus to help you with your goals and habits: Here’s Google’s Matt Cutts talking about trying new things for 30 days.

And here’s Jerry Seinfeld’s “Don’t break the chain” motivation and productivity technique (via Lifehacker): Jerry Seinfeld’s Productivity Secret

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Don’t Let Your Goals Fizzle Out! – 5 Reasons Goals Fail, and What You Can Do To Make Yours Succeed

Some want to exercise more.  Others simply want to lose weight.  Some want to save more money, while others want to get out of debt.

What do you think of New Year’s resolutions?

I’m not sure what to think, to be honest.

On the one hand, I think it’s important to have goals.  A great goal that you follow through on give you guidance and something to aim your energies towards.

But I think setting a resolution or a goal just because the calendar changed is a bit odd.

Why not set goals throughout the year?

My Problem with Most Resolutions

If you look up some studies and statistics on New Year’s resolutions then you quickly see how dismal the success rates are.  Many don’t even keep their resolutions through February, no less the entire year!

And most who create a resolution make it way too general, like “I want to lose weight,” or ” I want to save more money,” or “I want to get out of debt.”

But do you see the problem with these resolutions?!?

They sound great but they are too general.  The goals have no focus and as a result, they are difficult to follow through on.

So what happens after you fail to keep your resolutions?

I’ll tell you.  You feel like crap.  You failed and you feel like a failure.  You feel guilty for not keeping your resolution.  You lose confidence in yourself for not completing what you said you would.

How is that healthy?

Make Your Goals S.M.A.R.T.

If you truly want to make a change in your life and set a goal, make it SMART — Specific, Measurable, Actionable, Realistic, and Time-bound.

The idea is to really get your head around what your goal is and figure out how you are actually going to achieve the goal.

You need to know exactly what is is you want.  Figure out what satisfies your goal (for example, if you want to lose weight, how much weight do you consider a success?).  Make sure you can actual work towards your goal and you can act on what you want.  Give yourself a limit to when parts of your goal must be done by.  Break your goal out into smaller pieces that will be steps towards the larger goal.

Try it for 30 Days (or 60 Days)

Another method to use is to try something for 30 days.  Well actually about 66 days.

Some research has shown it takes about 21 days or so for an action to become a habit, where we no longer have to fight our willpower in order to do something.

In 2009, researchers from the UK Health Behaviour Research Centre found that it takes, on average, 66 days to form a new habit.

No wonder most people fail at their resolutions!  You need about 2 months of practice towards your habit or goal in order for it to come automatically.

But it still can be done.

Starting with one week, one month, or 66 days is a start and a step in the right direction.  Use with SMART and you give yourself a better guide to make sure you will follow your resolution.

Always Look to Improve

I mentioned earlier that I don’t think a calendar change into the New Year should trigger a flux of goals in people.  Honestly, I think we should always be looking to improve ourselves.

If you find there is an area in your life that could use improvement or change, take the steps to do it.  Don’t wait on the New Year, or any other time, to start.

Don’t let the calendar be an excuse to wait.

And don’t worry if you don’t get it perfect right away.  Life changes and we aren’t perfect.  Work towards your goals and make adjustments as you go along.

Change is Good

I think a big part of us being human beings is that we can make changes in what we are.  We don’t have to sit back and resign ourselves to being the same all the time.

Bad habits can be hard to break, but they can be broken.  I don’t believe in the saying “you can’t teach an old dog new tricks.”

Maybe it’s because I’m still relatively young.  But to me, if we can’t change then that’s truly sad and we lose out on a big part of our humanity.

We are ALL awesome!  Really, I mean that.  There is something incredible inside each of us, we just have to find out how to make it show.

I’m going off on a bit of a tangent.

It’s just that it bugs me when I see people saying they want something different and I know they won’t really do what it takes to make the change.

Maybe it’s because I’m afraid of change too.

I don’t want other people to feel the same way I have (and sometimes still do).  There have been plenty of times I’ve felt lost or stuck and didn’t think I could really change my circumstances.

Other times change has just been plain scary.  Hell, it still is.

But as I’ve aged I’ve realized that I’m the one who controls my fate.  If I don’t take control then who will?

Change can happen if you really want to make it real.

That’s All Nice but What Does that Have to do With Personal Finance?

What’s among the most common New Year’s resolutions you hear?

Lose weight and exercise more.

How many times have you heard someone say that as a resolution?

So what happens?  People go out in droves and gobble up gym memberships.  They set up monthly fees that get pulled from either their checking accounts or their credit cards.

Now imagine this — For many people, they’ve just set up a gym membership in January, one of the coldest months of the year, full of short days.  It’s freezing out and all you want to do is get home after work.  Are you going to the gym to sweat?  And come home in the freezing dark, wet?

Do you see why the whole gym membership in January just might not work?  We’re set up for failure!

And it’s a drain on your finances!

Other common resolutions are to save more and eliminate debt.

These after a holiday season of buying gifts.  You get that first credit card bill in January and you wonder how you will ever pay off the prior month.

Failure again.

Not that you shouldn’t set goals.  Just that you have to set them up in a way that you can achieve them, which I don’t think most people do.

What are your thoughts on New Year’s resolutions?

Do you make them?  Do they work for you?  How do you follow through?

Or do you just not bother with them?

Let’s get a conversation going in the comments!

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What Do You Think of New Year’s Resolutions?

It’s always nice to get a nice chunk of change coming back to you, isn’t it?

But what will you be doing with your income tax refund?

I’m not always fond of looking forward to a large refund but they do happen and I know some people love getting them.  If you are getting a large income tax refund then at least put some thought into how you are going to use that money.

Having money in the bank is a great thing and when it’s a sizable amount you can really make some differences with your finances.

I came up with some ideas for a large income tax refund. 

I’ve broken it out into different sections to make it easier for you to find something of interest.  Make sure to read through to the end and add your suggestion in the comments!

25 Ideas for Your Income Tax Refund

Debt

1. Pay off credit cards

If you have credit card debt then a large tax refund can be your opportunity to put a dent in or end your credit card debt.  Pay it off and you save by not paying as much interest charges!

Think about it – if you are paying interest on your credit card debt  then you are eroding your potential for wealth.  Go attack that credit card debt!

2. Pre-pay mortgage

You can take that refund and pre-pay your home mortgage.  You may be able to do an extra month or better.  Not only does this payoff the principal on your mortgage quicker but you also save on interest payments over time.

You have the potential to save thousands here.

3. Pay off student loans

If you have private student loans then now is a great opportunity to pay some off.

Why private student loans?  Those tend to be the ones with the higher interest rates.  Even if they aren’t private loans you can still make some extra payments to help get rid of your loans earlier!

4. Car loan

Pay off all or at least some of your outstanding car loan.  Make sure the payment goes toward the principal.

Savings/Investing

5. Contribute to an IRA

Get money into your IRA now so you aren’t waiting until the last minute next tax season.  A Traditional IRA will give you tax breaks now while a Roth IRA gives you tax breaks when you retire.

Add a little padding to your financial future now so you don’t have to worry so much later on.

6. Contribute to a 529 plan

Not only are you investing in your children’s college future but many states offer plans with tax advantages.

7. Put it into a high-yield savings account

Sock it away and earn better interest than you would n a brick and mortar bank. (Check out some great offers and bank rates for high-yield accounts.)

8. Buy CD’s (Certificates of Deposit)

Set up a CD ladder for continued returns.

9. Start a small business

It doesn’t take a lot of money to start up a small side business.  You could even try your hand at creating a website!

10. Build Up Your Emergency Savings

If you don’t already have 8-12 months of emergency savings away then now would be a good time to start!

11. Invest in Stocks

Take a small amount that won’t hurt you if you lose it and learn to invest in stocks.  You can open up an inexpensive online brokerage account.  (Check out our list of the best inexpensive online brokerages.).

Fun/Family/Enrichment

12. Take a College Course

Register for a college course or technical course.  This could be for your own interest or as a way to help advance your career.

Think about it, you might be able to take a course that could potentially put you in line for more money in your career.

13. Travel and Go On Vacation

Take the money and run!

Ok, maybe not like that but it could be a nice chance to plan out a great vacation with the family!  I’m always one for saving but building great memories with your family is important too.  Everything in moderation.

14. Fix Up Your Home

Paint, renovate, upgrade appliances, get new furniture – make your home a nicer place to live in.

Some renovations can yield tax breaks while also building up value for your home should you ever want to sell.

15. Set Up a Fun Money Account

Take the refund and put it into a sub-account in Capital One’s online 360 Savings (or similar savings account).  Label it fun money.  Throughout the year take money out to do things like go to the zoo, amusement park, museum, movies, etc…

Do this and you have money set aside to have some fun with.  It also keeps you from reaching into other funds you may need or worse, using credit you might not be able to pay back quickly.

16. Upgrade Your Work Wardrobe

Replace some of those worn-out threads.  It can make you feel better at work as well as look better to get you noticed.  A few quality pieces might be all it takes to improve your wardrobe.

You never know, your boss might take notice and put you up for that next promotion.

17. Take Care of the Car

Get your car a tune-up and a full detail cleaning.  Taking care of your car will help it last longer and perform better saving you money in possible future repairs.  It will also help the resale value of your car should you want to sell it.

18. Grow a Garden

I love our modest garden.  It’s so relaxing and satisfying taking care of it.  You get an extra bonus if you can grow your own vegetables to eat!

19. Donate to Charities

Give money/time to those who need it more!

20. Eat Better

Have you been telling yourself that you would eat better if you could but it’s too expensive to eat more natural and organic?  Put the money aside to buy better food for yourself and build up better-eating habits.

21. Enroll the Kids in an After School or Weekend Program

Sign them up for martial arts, little league, soccer, music, swimming, dance, etc…  You not only enrich them you also might be able to give yourself some free time too.

22. Take Up a New Hobby

Learn a musical instrument, play chess, learn a language!

23. Get Together With Old Friends

Call up some of those old buddies and treat them to a night out to the local pub or to a local sports game.

24. Take Your Spouse Out On a Date

Hire a sitter and treat your spouse to a night on the town!

25. Do Something You’ve Never Done Before

Think outside the box and stretch your boundaries.  Go out and live. Experience.  Create great memories.

Of course, these are all suggestions.

Make sure you take some time and think about what you will do with your income tax refund.  Don’t be impulsive and let that money burn a hole in your pocket.  Be responsible and take care of debts.  Have a little fun too, if you can.

What will you be doing with your income tax refund (if you are getting one)?

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How to Spend Your Income Tax Refund – 25 Ideas

The very next thing you say once you file is “where’s my refund?”  We can’t wait to get that money owed to us.

Indeed, many people have already received their tax refunds.

When you get your tax refund depends on two main factors:

1. How you filed (mail or e-file)
2. How you receive your refund (paper check or direct deposit)

If you mail in your tax return and opt to receive your refund in the form of a check from the United States Treasury, it can take as long as two months or more to see your tax rebate.

This is the combination that takes the longest.

You can speed things up if you decide to e-file when receiving a paper check or to get your tax refund via direct deposit if you mail in your return.

However, it still might take as much as a month to get your tax refund.

In order to get your tax refund in the shortest possible time, you should e-file and opt for direct deposit.  You can get your tax refund in as little as seven days when you do this.

If you are going for speed, the fastest way to get your money is to e-file and get direct deposit.

Checking the Status of Your Refund

The IRS has a handy tool that allows you to easily check the status of your refund.

You should be aware, though, that the tool won’t work if your return isn’t already in the system.  If you mail a paper return to the IRS, it can take more than a week or two to get your return in the system so that you can check the status of your refund.  If you e-file, though, you can look up your refund status after 72 hours.

Here is what you need in order to use the IRS “Where’s My Refund?” feature:

• Your Social Security Number or your Individual Taxpayer Identification Number
• Your filing status (single, married filing jointly, married filing separately, head of household, etc.)
• The whole dollar amount of your refund, as shown as your tax return

Once you fill that information in, you will receive information about whether or not your return was received, and whether or not it is processing.  You will also find out what date your rebate will be deposited into your account, or mailed out to you.

If there has been a problem, such as a mistake in the address, or the bank account number, you can find out about it from this tool.  You will be notified of what you need to do to correct the problem to get your tax refund.  You can even start a refund trace from this tool if you have not received your refund within 28 days of the original mail date listed at “Where’s My Refund?”

Update: The IRS now has a mobile app you can use use on iPhones (available in the Apple App Store) or Android phones (in the Android Marketplace).  It’s called IRS2GO.

I gave the tool a shot to see how well it worked.

I entered my social security number, filing status, and the dollar amount of my expected refund (you do have to enter the actual amount, I tried a different amount and it didn’t work).

As advertised, the date my refund was expected to be deposited was given.  I always want my refund right now, but I’m willing to wait. This gives me a little time to think about how to invest the money.

The digital age has made tracking your refund easier than ever, especially if you e-file.  Take advantage of this technology to find out when you will get your refund quickly and easily.

And hey, don’t blow your refund!  Make sure you do something useful with it.

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Where’s My Tax Refund? How to Check the Status of Your Tax Refund