From 24/7 Wall St. · Jake FitzGerald · · 1m 10s
Santa Claus Does Not Live in Washington D.C.
Dave Ramsey says a $3,000 tax refund is a government loan, not celebration.
In brief
Dave Ramsey says a $3,000 tax refund is a government loan, not celebration. A $3,000 tax refund costs debt-free savers $26 yearly but hundreds for cardholders. Originally reported by 24/7 Wall St..
Ramsey's Tax Refund Warning
Dave Ramsey calls a $3,000 tax refund an interest-free loan to the government.
“Santa Claus does not live in Washington D.C.”
The $26 Annual Cost for Savers
A debt-free saver loses $26 yearly by holding $3,000 in a savings account.
Credit Card Balance Saves $636
A household with a $3,000 credit card balance saves $636 in interest yearly.
The Real Cost of Refunds
Debt makes Ramsey’s point stronger: cardholders borrow from banks at 21% while lending to the IRS at 0%.
Ramsey's EveryDollar App Pitch
Ramsey promoted the EveryDollar app during a segment to help track refunds and savings.
How to Adjust Your Refund
Run the IRS estimator, check card balances, and file a new W-4 to avoid owing tax in April.
The Refund Decision
The refund costs a debt-free saver pocket change but hundreds for cardholders, so interest rate decides the cost.
Here's the gist
A $3,000 tax refund costs debt-free savers $26 yearly but hundreds for cardholders.
