Great Ways to Use Your Tax Refund and Not Let It Go to Waste
The new year has turned and April 15th is coming fast. We are all working hard to file our taxes so the IRS doesn’t come and arrest us. If you are like most Americans, there is a pretty good chance that you will get some sort of money back from the Internal Revenue Service after you file your taxes. Before we proceed any further, take this hint of helpful advice. Stay away from refund loans, they are very high in fees and can often leave you in trouble if your tax filing doesn’t go quite as you had hoped. Be patient, and wait. When you finally do get your tax refund in hand, consider one of these great ways to spend your tax refund!
Pay off Debt. Most of us have some rather large consumer debts we like to pretend doesn’t exist. This can be credit card debt, an automobile loan, or some back-alley deal with a loan share. If you owe it, your tax refund will be well used if you use it to pay down some of your debts.
Use it to Help Others. There are so many unmet needs in North America, consider using the money to help others. You can use it to help fund your local church, support a worthy charitable, or you can follow the lead of the “Secret Santa” and just hand out money on a street. It will be one of the most rewarding things you can ever do.
Save for the kids college. If you have kids, they’re probably not going to want to work at Wal-Mart for all of their life, so it might be a good idea to save some money in a 529 plan or an educational savings account. This will help them avoid massive amounts of debts when they become undergraduates.
Replace aging vehicles or appliances. If your car, washing machine, refrigerator, or television is about to bite the dust, it might be a good time to replace them. This way you won’t end up financing that purchase when it needs to be made.
Save it for emergencies. There are things that come up and knock us all off our feet. It could be an unexpected medical expense, an automobile break down, or a job loss. We know some of these things will happen sometime, but we’re not sure what our when. Consider saving the money so you can take care of an emergency when it does happen.
You will definitely note that none of these suggestions involve spending money on some extravagant trip or purchase you don’t need. This is because this is extra money that you didn’t have before, so don’t blow it like most people do! Use the money wisely.
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I hate knowing how much I am going to get back months before I get it. When my wife and I find out, we start making a list of things we need: clothes, furniture, landscaping, put some in savings, alarm system, etc… We feel like we spend it on good things, but we begin to have a mind set that this is some sort of lottery winnings, which it ISN’T! If I didn;t know how much I was getting back until the check came, I think I would spend it more wisely. I might put it in savings until “I think of something to spend it on.” months will go by, life will take over again, and the money will just sit in my savings account… a safe place for it, earning interest. Or, I might say “Hey, we got $3,000, we owe $6,000 on the car, let’s just put it to that.” rather than making a list of things to spend it on.
Next year, I may tell my accountant not to tell me what we are getting back and I will blindly sign the papers.