As tax season is coming to an end, you’re likely looking forward to getting your tax refund back. Having a little extra cash on hand is always a good feeling. Do you know what you will do with it? There are several options when it comes to using your return in a constructive way. Keep reading to discover ideas to make the most of your tax refund.
Put money aside for bills
Unfortunately, most bills come every month. With some extra money in your pocket, you can use some of it to help cover bills. Whether on paper or on the computer, figure out the expected total of next month’s bills. Once you have an idea about what you’ll have to pay, prepare to set some of your refund aside.
Pay off debt
If you have any debt that you need to take care of, you can also put your tax refund towards paying it off.1 Whether it’s lingering student loans, your mortgage, credit cards or car payments, acting on outstanding charges can put your mind at ease and your return to good use.
Save for retirement
No matter what your age is, it’s not a bad idea to start saving for retirement now.2 If you don’t have an account for retirement savings, it’s a good time to start one. You have options when it comes to saving for retirement, such as plans through your employer, a private firm or starting a savings on your own. Research your options to see what works best for you.
Maybe now is the time to boost your economic portfolio and look into investing opportunities3. Once you receive your tax refund, do some research to see if investing in stocks or bonds would be a good option for you. You could also see if your employer offers investment opportunities as well.
Set some aside for your rainy day fund
Sometimes, things don’t always work out the way we want them to. Accidents and unexpected expenses happen. When instances like this do happen, it can be stressful on you and on your finances. Try to minimize the impact of rainy day events by putting your tax refund towards an emergency savings fund. If you haven’t already started one, now is the time to do so. Having an emergency fund ready can even provide a feeling of security in your everyday life.
Save for your children’s education
If you have children, why not start saving for their education? College tuition and related expenses are not cheap, and there is no sign of these costs slowing down. There are several options to help saving for college, such as a 529 Plan or Education Savings Accounts. Just be sure to do some research so you can select a plan that best works for you and your family.
While the options above are all smart ideas for your refund, the ways you can use it don’t all have to be so serious. You work hard, so you deserve a little reward every now and then. Whether it’s a manicure or an item for the house you’ve been wanting, it’s okay to put a little bit of your refund towards something nice for yourself.
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1Irby, LaToya. (2022, Apr 6). Retrieved from: https://www.thebalancemoney.com/reasons-to-pay-off-debt-960047
2Lieber, Ron. Retrieved from: https://www.nytimes.com/guides/business/saving-money-for-retirement
3Rapacon, Stacy. (2023, Mar 7) Retrieved from: https://www.forbes.com/advisor/investing/tips-for-long-term-investing/