It’s that time of year – people are starting to receive their tax refunds! Not everyone gets a tax refund, but if you find yourself with a little something extra in your bank account, then it’s time to put that money to work. Here are 5 smart ways to spend your tax refund:
1. Pay Off Debts
I know, I know… If you have been reading our other posts, then Liann and I probably sound like a broken record by now. However, it truly is important to squash debt when you can. So, if you have some outstanding debt, use your tax refund to reduce it. It will save you some paid interest in the long run.
2. Contribute to Your Retirement
Your future is important, but you may not always have the opportunity to maximize your contributions. The tax refund is a perfect opportunity to do just that. You can use the refund to get you closer to maximizing the contributions to your Traditional IRA or Roth IRA.
3. Save It or Invest It
Have you reached your emergency fund goal yet? If not, you can use some of your tax refund to help reach your goal. Alternatively, you can always add a little extra padding to your savings account or use the funds for investments.
4. Invest in Yourself
Nowadays, there is so much to learn. You can learn a lot through free resources like the library or researching the internet, but sometimes it pays to invest in education. This can be any type of education that furthers your desired skill set or expands upon your knowledge base. Whether you decide to enroll in college or pursue online courses, your tax refund can be used to help cover the cost.
5. Satisfy a Need or Want
Everyone has needs and wants. If you have all of your bases covered, then a tax refund can be just the thing to help you take care of a need or want. Need to get the house repainted? Want to replace your appliances with new energy efficient ones? Your tax refund can help offset these costs!
So, what will you do with your 2018 tax refund? Let us know in the comments.