What’s going on folks? It’s that time of the year. It’s tax season. Are you ready? I’ve had times where I received big refunds before. I’ve also owed money (I currently do and it sucks). Everybody’s situation is different. Many people in the country choose not to get a refund. They adjust their tax info and receive more money during the year. If you plan on receiving a tax refund, then this post is for you. Below are five good uses for your tax refund.
Pay off debt
If you get a large enough refund back, you can pay off some debt. For some, this refund comes right on time. You can apply the money to your debts including credit cards or student loans. One year, I was able to pay off a personal loan a few months early because of the tax refund that I received. That was a damn good feeling. Every extra payment gets you closer to eliminating the debt. Even if you don’t want to use all of the money to pay off debt, you should at least use a couple hundred of it for that. You will thank yourself in the long run. I guarantee you won’t even miss the money.
The second thing that you can do with your tax refund is to save it. Everyone should have some money saved. Things happen that are out of our control from time to time. By having an emergency fund, you won’t have to use your credit card for emergencies. That means that you won’t get any extra debt. If you don’t have an emergency account use the money from your tax refund to help you fund it. If you already have one, you can cushion your savings or checking account with the refund. You can also save for other things such as a new vehicle, a new house, or birthday gifts for your family.
Your emergency or new savings account should be one that is easily accessible. I have a “secret” account with Capital One. Money is automatically transferred from my main account each month. I rarely touch the account. If something happened and I needed the money, I could either transfer it to my main account or I could use the debit card that comes with it. The Capital One 360 is a good account for you to open up. Also, they are giving new members $25 if they make a deposit of $250 or more. For more details check it out here.
If you don’t want to open up a new account with a new bank, just put more in your regular account. Whatever you do, make sure that you save more money. It’s the least that you can do with your refund.
Another thing you can do with your tax refund is to invest it. If I received a large refund, this would be something that I’d consider doing. You could take some of the money and invest it in bonds or mutual funds. Depending on how much you get back you can take it up a notch. You could invest in stocks or maybe small real estate. Investing is a way for you to continue to grow your money.
If you’re interested in learning more about investing, check out Investopedia. They have a lot of useful information on that site. They even have a free stock simulator that you can sign up for. If you want to start slow, sign up for a program like Robinhood. It’s an app that lets you order stock from your phone. Robinhood has no account minimums and it’s free to make trades. Get one free share of stock when you sign up at this link today.
If you want to learn about trading in the stock market, check out this course titled Trade and Travel from Teri Ijeoma. She went from working a stressful job to making $1000 a day trading stocks.
Plan a vacation
If you’ve been reading this site for a while, you know that I love to travel. It is my anti-drug. Everyone needs a vacation from time to time. Another use for your tax refund is to book a vacation. Your vacation does not have to be expensive either. There are numerous websites to help you book your trips such as Priceline, Hotwire, or Orbitz. On those sites, you can compare airfare and hotels. If hotels aren’t your thing, you can use a website like Airbnb. Depending on where you’re going, a room on Airbnb could be cheaper than a hotel room. You can even get $40 off of your first booking with Airbnb. Visit their site here for more details. If you need help figuring out where to travel, check out some of these travel-related posts.
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The final way that you can use your tax refund money is to fix something that’s broken. Things get old and break every once in a while. You can use the extra money for house or car maintenance or repairs. For example, if you know the AC in your vehicle doesn’t work, use these funds to fix it. It’s better to take care of that now than to wait until it is scorching outside. If you have a project that you want to do at your house, this may be the time to do it.
Those are just a few things that you can do with your tax return refund. I can’t tell you how to spend your money, but I hope that you take some of these ideas to head. The worst thing that you can do is get that refund and splurge it without anything to show. A lot of people do that. I know you’re smarter than them though. Once you receive your refund take a couple of hours to do your budget, then come up with a plan on what you want to do with it.