Best Ways To Use Your Tax Refund
Want To Use Your Tax Refund Wisely? Keep Reading!
The first of the year often starts with a new, fresh outlook on life for many people, determined to have a better year than the year before. This means having a resolution or two; or more! If you are looking to make the best use of your tax refund this year, we have some things to consider.
Many people get a decent amount for their tax refund, and it can be hard not to go and spend it all at once. Especially if you have a list of things you need but don’t have the extra cash to get. It’s best to put your refund to good use and spend or invest it wisely. Here we cover some things to consider in order to use your tax refund in a way that will definitely benefit you.
Pay Off Debt
If you have any debt, you could use your tax refund to wipe it clean, or atleast to take care of a good portion of it. This is definitely a smart way to use the money. Maybe you have a credit card that is taking what feels like forever to pay off, or maybe there’s a lien on your car; you could use your tax refund towards these expenses.
Grow Your Emergency Fund
It’s always a good feeling to be able to put some money in your emergency fund. Maybe it’s been awhile since you’ve been able to do that. The majority of financial experts recommend that a person has at least three months worth of expenses in an emergency fund or any account that is easy to access to help cover unexpected financial emergencies. You could use your tax refund to add to your fund, giving you some relief should you have any surprise expenses come up in the future.
Add To Your Retirement Savings
This option is one we recommend if you’ve already accomplishd the first two above. You can use your tax refund to invest in your future; that’s never a bad idea! Retirement is the biggest goal for any person and is also one of the most difficult goals to reach for many. If you do not have any kind of retirement plan in place, consider starting with the funds from your tax refund. This could be an IRA or a ROTH.
While it’s always recommended that you use your tax refund for smart, responsible purposes, sometimes we need a little pampering too. We don’t recommend using the funds on yourself unless you have already paid off credit cards and other debt. Just take a small 10% of your refund and use it on something you’ve been wanting for a long time. This could be a new phone, wardrobe, or even a quick trip out of town.
The bottom line – you can use your tax refund wisely now and reap the rewards for years to come. Just imagine not having any debt hanging over you, or eliminating those car payments by paying off your lien; both of these will save you money because you won’t be putting money towards that debt anymore. The best ways to use your tax refund will vary by person, but the strategies and suggestions above can help you achieve financial success now and in the future.