The real start to the new year: How tax time empowers one SaverLife member to improve her financial health
Images by Belathée Photography
When Tenesha thinks about tax time, she feels relieved. As a single parent who works full time at Subway, she sees her tax refund as the real start to the new year. Once she has it in hand, she can map out her budget and ensure that her bills and expenses are covered for the next few months.
Tax season is an opportunity for Tenesha to take stock of her family’s financial health and make progress on some of her longer-term goals, like saving to take her kids on vacation and purchasing a home. But her story also points to the larger impacts that tax time can have on households living on low-to-moderate incomes. SaverLife has learned year over year that tax season supports our members to improve their financial stability, causing a ripple effect on how they allocate their money and plan for the future. In fact, 50% of surveyed SaverLife members put their tax refunds into emergency savings.
By sharing stories like Tenesha’s, SaverLife aims to shed light on the realities and challenges that people living on low-to-moderate incomes encounter when they file their tax returns and receive their tax refunds. This way, we can advocate for a tax (and financial) system that actively reflects their financial health goals.
Read on to learn more about the positive outcomes of Tenesha’s tax time experience.
Making the most of tax season
For the first time ever, Tenesha sees tax season as an opportunity to strengthen her family’s financial stability, rather than an urgent moment to pay off bills.
In previous years, Tenesha used tax time to cover holiday expenses: “Usually, I've had to make up the money that I’d spent on Christmas,” she says. However, this past year, she shopped on clearance and bought presents in advance, leaving her with no debt by the time January rolled around.
Without needing to catch up on bills, Tenesha used her tax refund to get ahead on monthly payments instead. “My main priority is using my refund for any past-due balances on my bills. Then I’ll try to pay one month in advance for everything,” she explains.
This shift also gave her more flexibility to plan when and how she would file her taxes. After researching different filing options, she decided to self file her taxes at the beginning of February, allowing her to build in time to correct potential errors if the IRS contacted her. Plus, she could save some additional money by filing on her own.
“My main priority is using my refund for any past-due balances on my bills. Then I’ll try to pay one month in advance for everything.”
Taxes and financial stability are closely linked
Whether paying off Christmas expenses or getting ahead on payments, Tenesha uses her annual tax refund to help plan for a future of lasting financial stability. To her, she knows she’ll have achieved her financial health goals when all of her bills are paid on time and she has an emergency fund that she can depend on for unplanned expenses. And she recognizes that her tax refund is helping her get there. “I don’t need to be rich,” she says. “I just need everything to be paid.”
Tenesha’s tax refund also holds secondary meaning to her family. Since Tenesha’s budget doesn’t include monthly allowances right now, she uses her tax refund to give her daughters $50 each: a “thank-you” for helping her with chores around the house.
“They don't get much all year long,” she describes. “With some of the refund, they can put the money away or they can spend it. I just want to show them that I appreciate their help.” This year, her daughters plan to use their tax refund money to purchase supplies for their two guinea pigs, Chip and Bubblegum.
By sharing her tax refund with her kids, Tenesha aims to teach them how to manage a budget and make the most of their money. She also hopes that, by talking with her daughters about planning and saving at an early age, they’ll grow up knowing how to achieve their own financial health goals.
As someone who had to untangle the many aspects of financial health on her own, Tenesha wants to make sure they don’t have to play catch up like she did. “No matter what their goal is,” she explains, “I want them to know you can get there if you put the work in. It might take a while, but you’ll eventually get there.”
“I want [my kids] to know you can get there if you put the work in. It might take a while, but you’ll eventually get there.”
Building confidence at tax time — and year-round
Despite the positive impact that tax season has had on Tenesha, she also acknowledges that self filing her taxes brought its own stresses. In addition to time and energy spent researching tax terminology and legislative changes to the Child Tax Credit (CTC), she felt that she wasn’t given much transparency about her filing options. “Filing on my own wasn’t really self-explanatory. Looking through the paperwork, I didn't even see what kinds of questions I would need to answer if I had to itemize deductions,” she describes. “It just tells you ‘this is what you need to do,’ instead of giving you options.”
Tenesha was also concerned that if she made any errors on her tax return, this would delay her refund indefinitely: “Filing on my own worries me, not because I have anything to hide, but because, if I did anything incorrectly, I might have to wait even longer for the refund.” Tenesha’s concerns parallel the experiences of SaverLife members who filed for the CTC in 2020 and 2021. In a 2021 survey, SaverLife research revealed that less than half (46%) of households that filed for the CTC received their payments in full and on time.
The breakdown between filing and actually receiving tax refunds on time is symptomatic of a much larger problem with the tax system. SaverLife is working to address these challenges by advocating for tax policies and credits that streamline the filing process for people living on low-to-moderate incomes. However, this doesn’t change the filing realities that SaverLife members are navigating now. That’s why, as part of our annual Tax Time campaign, we develop timely and relevant content and tools that they can use to file with confidence.
For Tenesha, this looks like reading Saverlife articles and member stories that reflect her own financial health journey. In particular, she found the SaverLife article on Tax Time scams particularly helpful: “The one that stood out the most to me was about the scams going around at Tax Time,” she says. “Had I not read that article, I would have had no idea that those were something to watch out for.”
“I do feel proud of myself because I’ve learned my own ways of being financially smart with my money.”
Tax Time is something that Tenesha admits she’s still trying to figure out. But she builds her confidence every year by researching and learning how she can best improve her financial health — during tax season and year round. “I do feel proud of myself because I've learned my own ways of being financially smart with my money.”
She explains that SaverLife has played a big part in this process by creating a welcoming online space where she can learn and feel supported. “It's more personal than just ‘we're throwing this information out there.’ SaverLife feels more like a family than just a website to go on.”
Looking to the future, Tenesha feels optimistic about her financial health plans. She’s curious to learn more about purchasing a home as a first-time buyer and about financial health topics that align with her savings goals. “I know that I will eventually get to where I want to be financially,” she concludes. “Everything just takes time.”
Tenesha’s story is part of SaverLife’s new Tax Time storytelling series that explores the unique realities that people living on
low-to-moderate incomes experience during tax season. This series wouldn’t be possible without the generous support of H&R Block.
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