Having a tax refund is always a welcome thing! What are you planning to do with your tax refund? Are you going to invest the money? Do you plan on taking it and spending it on something you have always wanted? How about taking a large portion of money and saving it or using the money to pay off your debt? It is a good idea to make plans for your tax refund so you can take advantage of this money instead of wasting it. Here are some ways in which you can properly use your tax refund this year!
Tip # 1 – Invest it
A great option for your extra cash is to invest it. Some people will invest the refund into their 401k plan or IRA where others will choose investments that are liquid. Using an online savings account is a great way to allow the money to grow but still having access to the money if you need it in the event of an emergency. Compare rates online to find out which online savings accounts can provide you with higher interest rates right now and will be able to give you the right type of returns that you need to grow your savings properly.
Tip # 2 – Pay off debt
One of the best things you can do with extra cash is to put it towards debt that you already have. Paying off your debt can really get you out of a difficult financial situation. Plan on getting your credit card balances below 30% of the total limit as this will really boost your credit score. Paying off debt will allow you to have financial freedom and really will help you sleep better as you aren’t dealing with this extra stress anymore!
Tip # 3 – Spend part of the money
If you do not have debt and you are coming into a pretty nice tax return, you should consider saving a great deal of that money and then spending a small amount. Plan on putting about 70% or more of the refund into your savings account and then you can plan on spending about 30% for something you have always wanted, a vacation, or a nice dinner.
Being smart with your money will pay off for you in the long run! Learn how to save your money and control your spending so you don’t waste away your tax refund this year!