Even if your tax refund isn’t as large as you’d like, it is a lump sum, one that can do so many wonderful things for you! Why not use it to make your life just a little bit easier?
1. Invest in Yourself
Maybe you’ve been wanting a new career, but haven’t had the money to get started. Training costs money. Perhaps you’re wanting to learn medical transcription and work from home some day soon. Bank this return and use it to fund your training.
2. Open a Car Account
If your car decides to call it quits, will you be forced back into the car payment merry go round? Tucking away each refund over the next 5-7 years could nearly pay for your next car.
3. Donate to Charity
Making a charitable contribution is always a smart way to spend your tax refund. By helping others in need you can do a great thing and lower your taxable income.
4. Begin a Home Repair Fund
If you’re a home owner, you’ll eventually have to replace your roof. Why not save up now for the money you’ll need? Build up your fund by depositing $10 or so from each paycheck. Also tuck into this fund any miscellaneous cash gifts you receive.
5. Open a Vacation Fund
The trick here is to allow yourself only a set amount to spend each year on your vacation, always leaving the majority of the money in the bank. Aim for spending only one-fourth of it each year, or a set amount like $500. Keep funding it with your refunds each year.
6. Save for a rainy day
This one technically is not a way to spend your refund, but it is a good rule of thumb is to have at least 3 to 6 months worth of living expenses saved in case of emergency. You never know what will happen tomorrow, so you should always be prepared.
7. Upgrade appliances
By upgrading to energy efficient appliances such as air conditioners or refrigerators, you can actually save money on your energy costs, which is also tax deductible. Additionally, these improvements can also increase the value of your house.
8. Use Your Refund to Pay Down Debt
Yes, you’ve heard this one before, over and over. A word of caution, though. If you constantly have credit card debt, it’s likely you’re still living beyond your means. What will keep you from spending more than you make after this year’s return has paid off your credit cards?
Why not split your refund? Pay off your higher-interest cards, learn to live within your means, and put some of the refund into an emergency account.
9. Set up an Expense Fund Just for Your Car
Let’s face it. We need to keep our vehicle running in order to go about the business of living. Remember the last time you had to quickly buy new tires? How did you pay for them? Cash? Credit card? How about replacing a broken headlight? Even small repairs can tap into money we don’t have set aside.
10. Hmmm… To Spend, or Not to Spend
Torn between saving your $1700 refund — or buying something wonderful? Calculate how many hours or weeks you’ll work to make that $1700 again. Remember, you’ll lose about 30% in taxes, etc. Would tucking it away help you feel more secure?
(How about a Bonus Tip?)
11. Expand Your Hobby into the Profit Zone
Do you have a hobby you love but haven’t had the money to turn it into a profitable venture? Set this refund aside to purchase supplies on sale so you’ll be ready to go.
Join the blog to post your ideas on what can be done with your tax refund!