Why Should I Adjust It?

Dear Dave,

We got a big income tax refund earlier this year, but I heard you tell someone to adjust their tax withholding so they don't get a refund. Why should you do this?

Justin

Dear Justin,

Let's say you get a $3,000 refund. Do you know why you got that refund? It's because you had $250 too much taken out of your paycheck every single month during the past year. Basically, you loaned the government $3,000 of your own money interest-free for 12 months. A refund isn't free money, Justin. It's your own cash that you get back because you paid in too much during the previous year.

Believe it or not, Santa Claus doesn't live in Washington, D.C. There's no free ride! So rather than loan the government money that you earned and worked hard for, how about bringing it home and using it to get out of debt and get control of your finances?

-Dave

* For more financial help, please visit daveramsey.com.

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