Discover How to Maximize Your Tax Refund
Make the Most of Your Tax Refund
It is the time of year where people are waiting for that tax refund. How will you use it? Pay for a vacation? Impulse buy? New shoes? Bills? Save it up? Here are a few ideas on how you can use your tax refund.
Create an Emergency Fund. Many Americans don’t have an emergency fund. A lack of savings can really hurt you if an emergency were to arise. It is recommended that an emergency fund has enough to get you by for a minimum of three months. Using your refund to start an emergency fund could help save you a lot of stress if something goes wrong.
Put it in a savings account. This seems simple enough, but it can be really tempting to spend it. Try to put it in a savings account that is more inconvenient for you to access, that way you aren’t as tempted to spend it.
Put in a retirement savings account. Why not save your money for your future self to enjoy, especially when it has the opportunity to really grow over time? Use the funds to purchase or augment a Roth or Traditional IRA and hide your money away for when you no longer are in a job!
Pay off any debt or bills. Student loan debt, credit card debt, bills, oh my. Use your tax refund to pay off some of your higher interest loans or credit card debt. It also doesn’t hurt to pay some bills with that money as well.
Prepay your mortgage. Even just an extra payment or two can really help save some money in the long run. You will have to pay off interest, so a few extra payments can help cut down on some of that.
Make home improvements. Out with the old, in with the new. Sometimes, simple home improvements, like replacing old windows, can help you save. Or, replace old appliances with new ones that are more energy efficient. Improvements can help save energy and lower energy costs.
Put it towards a major savings goal. Are you saving to go on an extravagant vacation? Maybe you’re planning a wedding. Or maybe you are saving for a new house. Put your tax refund towards this savings goal and you’ll be one step closer.
Buy life insurance. If you have a family, this is especially important to consider. Protect your loved ones and look into getting life insurance if something were to happen to you.
Start a business or consider continuing your education to advance your career. Do you have a skill or artistic talent you want to share with the world? Or maybe you want to go back to school to earn a certificate of some sorts. Buying necessities to start your business or spending it on an extra certification class is a great way to use your refund and advance your career.
Maybe do a little something special for yourself. Self-care, here we come! Take some of your refund to give yourself a little R&R time. Maybe go out to dinner or treat yourself to something special to celebrate your smart money management. You definitely deserve it!
These are some quick ideas on how to smartly manage your money, but they are not your only options! Carefully think about what the best approach is for your situation and go with it!
Still looking for help on your taxes? Click here for some help!