If you’re getting a tax refund, you have to push through the temptations to blow it. This money can help change your financial situation throughout the year not just for a few weeks. Here are 8 ways you can wisely spend your tax refund. Everyone is these ways to spend your tax refund will help better your financial situation and life overall.
Savings is always a smart move. Whether you’re saving for your $1,000 emergency fund or a fully funded security blanket (6 months of expenses). Both of these are very important, but at the very minimum, you should have your emergency fund ($1,000) funded.
Do you have a debt that is killing your monthly budget? Pay it off! The less debt you have the less you have to stress about monthly. Try to focus on the high-interest debts.
If you are living paycheck to paycheck and drowning in bills, use this money fund your emergency fund and get ahead in bills. Pay your rent up for a few months or your car payment. I have a friend that gets a big enough refund to pay her entire year. She’s a single mom, and it takes a huge burden off of her.
Investing in retirement
Whether you have a 401K through your employer, an individual retirement account or a savings account for in life, putting money towards your retirement is always a smart move. Most savings account have a high return.
Do you want to go back to school? If so, what better time than the present. Use some of this money to advance your education which will lead to better opportunities for you later down the road. My grandma used to tell me “Money comes and goes but education can never be taken from you”.
Does your home need some work? New tires for your car? Maybe some car repairs? Tackle some of those big expenses that would be a strain during the year on your budget. Plus improvements could add some value to your home.
Your own business
Have you dreamed of opening a business? Your refund could be the boost you need to make your dreams come true. Starting a business is hard, but having a little extra cash will get you started on the right foot.
Daycare here is expensive. You could use your refund to pay daycare tuition for the year or at least a good portion of it. If daycare is takin care of it not only takes the strain off the budget but also off of you. You won’t have to worry how you are going to pay for daycare or how you’re going to work if you can’t afford daycare.
Using your refund for splurges is fun, but if you play it smart, you can set yourself and your family up for a better year financially. Is going on vacation for 3 days better than struggling monthly to pay the rent? They say hindsight is 20/20 so think about the struggles you’ve had this past year and what this money could have done to help those.