How to Spend Your Tax Refund This Year
Every year, millions of Americans receive a surprise financial boost from the government in the form of a tax refund. While it might be tempting for you to head out to around Texas and Oklahoma and spend that whole check on a fun weekend, you should consider what the money could do for your future finances.
After all, if that check is sizeable enough to make an impact on your bank account, it could actually be life-changing — in the best way possible!
Instead of buying a new TV or going on a mini-vacation with the money, read how you can spend this year's tax refund wisely.
Separate the Funds
If you keep your tax refund mixed in with your normal bank account, it will probably get spent like the rest of your money. You should consider what using half of that money wisely could mean for you.
Create a separate bank account or a savings account and place it there. That way, you can more easily create a budget for the refund.
By putting half of your tax refund in savings or toward a smart investment, you can feel even better about spending the rest however you choose!
Start an Emergency Fund
Saving money is undoubtedly one of the wisest financial decisions you can make. Even if you don't have a healthy savings account in place right now, you can easily get one started immediately with your tax refund.
We firmly believe everyone needs an emergency fund. It's money you can rely on when times get tough, such as if you or a partner lose a job. One of the smartest things to do with your tax refund is to put it all into your emergency fund and continue to contribute whenever you have a little extra money. Ideally, an emergency fund can cover up to six months of expenses.
Put It Toward Retirement
Another one of the best things to do with your tax refund is investing in your retirement account. No matter your age, you are never too young to start saving. The best use of your tax refund could be to put the money into your retirement account every year to accrue value.
You can also put away just a few dollars a month and still see benefits. Any amount you save will grow significantly by the time you reach retirement age. Even if you can only manage $10 per week, that can turn into a nice nest egg when you make deposits consistently. Plus, some retirement savings plans earn you tax credits in the future. You won't find better advice on how to spend a tax refund.
Make an Investment
When you're wondering how to spend your tax refund this year, the answer may be to make that money go further. Becoming an investor in the stock market can be a superb option for growing your personal wealth. Investing in the stock market can increase your refund in the short term, giving you a higher return than some other wealth management options.
If you are already financially secure enough to not have to worry about your monthly bills, pouring your excess into investments can pay off in amazing ways.
Fund Your Career Improvement
You earned the tax refund by working hard, so put your tax refund hard to work for you. If you're wondering what to do with a tax refund, put the money toward self-improvement and take a continuing education class that will help you excel. If you want to increase your earning potential, you have to invest in yourself. This is an investment that will pay off in the long-term.
Pay Off Debt
Whether you have credit card bills, a car payment, or even a personal loan, taking advantage of your income tax return and paying down your debt is an incredibly smart financial decision.
Some individuals receive considerably large tax refunds that can wipe out a whole mountain of debt all at once. Others may only receive a small amount, but any money paid toward eliminating your debt means you will be that much closer to financial freedom.
This is not only one of the smartest ways to spend a tax refund, but also a great way to improve credit. When you make payments on your debt, it shows lenders you have the means to pay back what you borrow.
Make Smart Purchases
Instead of blowing the rest of the money on frivolous items and entertainment, think about the future. Could you use better insulation in your house for the summer heat? Could you put a down payment on a new car? Always choose what to do with tax return money and your expenditures wisely.
Once you've made these smart choices with your refund and you know you're set for the near future, spend the rest on yourself. You've earned it!
And remember, if you haven't gotten your refund yet but you need money immediately, you can always go with a personal loan from Atlas Credit. Customers throughout Texas or Oklahoma should know they always have the option of a loan of up to $1,400 on a 5 to 12 month repayment plan. Call us today, apply online or visit one of our many locations throughout Texas and Oklahoma!
