THE SHORT · TAX
Your $2,400 tax refund cost you $192
A big refund means $200 too much was withheld every month. The money was yours, it slept elsewhere, and meanwhile your card was running at 19.99%.
The refund arrives in spring, it is $2,400, and it looks like a gift. It is not: it is your money, over-withheld all year and handed back without interest. $2,400 over twelve months is $200 a month that never passed through your account.
Meanwhile, your card balance was running.
| Over twelve months | Interest paid | Balance at the end |
|---|---|---|
| The $200 paid onto the card each month | $80.16 | $0 |
| The $200 held back by tax | $272.03 | $1,512.63 |
Assumptions: starting balance $1,240.60, rate 19.99%, no new purchases. The interest gap is $191.87, and in the first case the debt is gone before summer.
That is the cost of the 0% loan you granted without knowing. It shows up nowhere: not on your assessment, which only talks about tax, and not on your card statement, which only talks about interest.
The reverse exists too and costs more still: a balance owing in spring means not enough was withheld, and it arrives all at once. Both are corrected in the same place — source withholdings, which can be adjusted on request.
On Yoseri's Debt page, an extra payment is simulated on your real lines: you see where $200 more a month lands, and what it does to your end date.
Your money, with no made-up numbers.
Accounts, budget, savings, debt and investments in one statement. Free with manual entry.