It’s that time of year, tax refund season. This mean you may have a bit of a surplus sitting in your bank account right now and you may not be sure where or how to spend it. Trust me, this happens to the best of us. So I’ve done some research and put together this list of the best uses for your tax return.
Buy Some Financial Freedom
Many Americans are carrying around more high interest debt – mostly credit card debt. Though your wallet may not feel like it’s getting heavier month after month, the interest continues compound.
If this year’s tax refund doesn’t cover the entire balance – don’t be discouraged. Consider transferring the remaining debt to a card with a lower interest rate or consider a lower interest rate debt consolidation loan.
Peace of Mind
We all sleep better at night knowing that our bills are paid and there is a little cushion in the bank. Now is the time when you want to start or add a little extra to your emergency fund. Ideally, you want to have enough to cover 3 months of must pay living expenses. It’s never too early to start sleeping better at night. That flat tire, broken water pipe and broken arm never tend to come at the most opportune moments.
Spruce up Your Home
You know that ugly fixture that you dislike more each and every time you see it? Outdated pink bathroom? Take the time now and make these upgrades around home. You will be very glad in 6 months that you invested in home. Have big expenses coming soon such an A/C or roof replacement? Start planning for those now, just in case they need replacing even sooner than expected.
Invest in Yourself
Education is the one thing we can never have too much of. What is something that could better you – whether it be professionally or personally. There’s always something we see and think, “Wow, I should do that” – well guess what, there’s no time like the present to make that happen. Invest in yourself now, your future self will thank you.
Buy Some Good Karma
Donating money to a cause that’s close to your heart is a win-win situation. You get to benefit those in need and you get a warm fuzzy feeling. Make sure you keep track of these donations – they may be a tax write-off for next year.
Itemized Savings
Do you have a list of down the road projects? Braces, new roof, family vacation, new car? Start planning for these expenses now. Planning helps prevent the amount if any debt you will have to take on in the future.
Buy a Home
Are you a renter your home aka paying off someone else’s mortgage? Take that tax refund and put it towards buying a home. Did you know that there are grants and bonds available to also help with your down payment and closing costs. Purchasing a home is likely more within reach than you may think. Did you know FHA loans only require 3.5% down?
