10 Money Smart Things to do with your Tax Refund

 

Tax season is knocking on everyone’s door.  Baiting some of us to spend it all in once place, on something wild and crazy.  Vacations?  New car?  Outdoor swimming pool for your home?  While those are all amazing and awesome sounding ideas, they don’t necessarily mean that they are the best money decisions to make.

what to do with tax refund

10 Money Smart Things to do with your Tax Refund

We all have wants.  No one is impervious to that emotion…Some spend money on clothes, some on homes and some on yummy food…each of us have our “loves” in life.  While splurging here and there may be fun, there’s a time and place for everything.  Tax return time can be a really hard time to find that stop button on purchasing those wants…but, it is possible.  If you need a little brain fuel on ways to use that return wisely, here are a few suggestions for 10 Money Smart Things to Do with your Tax Return.

  1.  Pay yourself first.  Decide an amount between 10-20%.  Pick a number, any number.  Whatever you choose, that is money that you pay yourself first.  Ways to pay yourself could be adding to your retirement fund, your savings fund or even just straight into your checking.  Regardless, you pay yourself first.
  2. Prepare for the unexpected.  While calling something an “emergency fund” can seem a little daunting…it’s important to have one.  Life happens and is sometimes out of our control.  By putting a portion of your tax return away for a potential need later, it is a great way to stress less when something may happen.
  3. Buy a need.  You read it right..a need, not a want.  Is your home in need of a new appliance or repairs?  What better time to make those purchases then when you have some excess cash flow coming. Not enough in the return for your ‘need’ then put a percentage of the return away to save for that purchase and contribute weekly towards making it happen.
  4. Reduce that mortgage loan.  Take a look at how much you still owe on your current home and think about applying a portion of your tax return to lesson that debt.  Even an extra payment or two towards the principal is a smart and responsible way to use those funds and ends up saving you interest along the way as well.
  5. Invest in your passion.  Have you been thinking long and hard about branching out on your own, and feel that after all your preparation and planning, you are ready to do so?  Then invest in yourself and your future with your tax refund.  What an amazing gift to be able to give to yourself.  The gift of owning and running your own business.  I earned myself this blog a couple of years ago for pennies but have invested much more with small bonuses like tax refunds. Interested?  Learn more here.
  6. Be patient.  Who says that you have to do anything at all with your tax refund right when you receive it?  Don’t pressure yourself into making a decision, if you aren’t 100% behind that choice.  There is time to evaluate your needs and decide at a later date.
  7. Educate yourself.  Love to learn and want to improve your resume for your future career?  Use that tax return to take a few courses and get back into school.  Get ahead by using that refund!
  8. Tune-up that car.  Putting off needed improvements for your vehicle may end up doing some expensive damage in the long run.  Take it to a garage and have ’em spiff it up.  If your car is paid off, taking care of it needs to be a priority.  No one wants to be back in the land of car loans due to a car breaking down!
  9. Make your health a priority.  Start buying healthier food and eating better and get a few pieces of workout equipment for your home.  Investing in your health seems like an extremely smart idea on how to spend your tax return!
  10. Set up a scholarship fund.  Do you want to give back to your old Alma mater?  Set up a scholarship fund for students within a certain degree or for those about to graduate high-school.  It can be a one time scholarship or a reoccurring, depending on the amount.   GIVE back.  Giving to any community cause or something for the greater good is always a good idea.  Start a change jar specifically for just giving going forward.  Your tax refund is a good time to start better habits.  

TIPmake a list of what you plan to do withour tax return ‘before’ it hits your account.  Once or twice review the list, make sure it’s a list you can financially live with.  Once you finalize your priorities than hang it up and stick to it!  

Whatever your choice, choose wisely.  Tax return time only happens once a year.  Spending wisely with your return this year has potential to keep helping you out throughout the entire year by saving money along the way.  Fight the urge to spend on the wants, before you address the needs.  While it may be hard, it is a huge relief in knowing that you are taking care of yourself and your future in a responsible way.

Tip 2 Check out these 10 questions to ask yourself before spending.  

Tip 3:  STOP watching TV!  Those ads are geared to make you want to spend!  I DVR everything and fast forward through those ads, it’s probably saved me thousands.

What are your tax refund plans?

Thank you bunches for stopping by today to read.  It means the world to us here to share our thoughts with you.  We’re looking forward to having you back again real soon.

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