Uncle Sam is a Bad Banker

When I was a young lad I watched a chemist demonstrate some of the magic of science. The trick that stood out most was when he dipped his hand in glucose or sucrose or something like that and then lit his hand on fire. The fire burned the sugar and not his hand. He then waved his hand and the flame blew out. Way cool.

Later that day, I decided I just had to do this trick. Because I didn't know exactly what liquid was used, I improvised. My mom had a nice big bottle of rubbing alcohol (isopropyl alcohol) in the house for first and sterilization (and magic tricks!).

I poured half of the bottle into a Tupperware­® bowl. In went my right hand. I waved the magic hand over a burning candle on the table and voilá...burning hand. The only problem was that Wikipedia wasn't invented then so I couldn't read this very clear warning to aspiring magicians:

"Isopropyl alcohol vapor is heavier than air and is highly flammable with a very wide combustible range. It should be kept away from heat and open flame."

In a matter of milliseconds, I experienced first-hand the properties of this liquid.

Hand on fire...check.
Hand not burning...ummm.

Not cool.

To make matters worse, I tried the trick of waving my hand to put out the fire and that only made my hand burn faster.

Fortunately, I had the presence of mind not to try and douse the fire in the nearby bowl of rubbing alcohol.

When the blaze was finally put out, I quickly cleaned up my mess and never told a soul about the incident. Why? Because I was embarrassed. Ashamed even. Which brings me to my topic:

If you are using Uncle Sam as savings account, you should be ashamed of yourself. Let me explain.

I know of some folks that have a hard time saving money. Whether it be for a rainy day, a new car, or a fun new gadget, they just can't seem to save a penny. So, in an effort to combat their weakness, they allow Uncle Sam to keep more money than he should during the entire year so they can get a nice, fat tax refund.

Why not change their withholdings so they can bring more home in every check? Because they would spend it, or so they reason.

This is sad on many levels, but it kills me to think that the money is not even earning simple interest in an ING account.

Is it nice to get a tax refund? I suppose it's better than owing taxes. But guess what? It was your money anyway. You didn't win the lotto. In fact, you really lost out. That money could have been working for you.

Best thing to do: Adjust your withholdings by filling out a new W-4 at work. You can do this any time during the year. Your monthly take-home pay will increase and you can set up an automatic savings plan to start socking away that extra cash.

So, next time you want to brag to your friends and family about your ginormous tax refund, think about what really happened...and make a change. There are better ways of improving your financial discipline that using the government as a bank.