It’s that time of year again! Are you excited to receive your income tax refund? The big question is, how should you use the money? Refund season is an exciting time that many people look forward to year round. Whether you decide to spend or save, here are some ideas on how to put that refund to good use.
Pay Off Debt
Consider paying off debt with that large amount of money. Credit card balances are among the leading contributions to debt. According to the site Nerdwallet, United States households collectively owe $712 billion in credit card debt. Freeing yourself of this financial burden can give you much more freedom throughout the year.
Make a Rainy Day Cushion
You never know what tomorrow may bring, like a flat tire or your pet getting sick. Having extra money saved will help financially prepare you for these unforeseen events. Ideally, it is best to have a three month emergency reserve to cover the unexpected. Though your return might not cover that entire amount, it gives you a good head start and peace of mind.
Home Is Where The Money Is
There are a few paths you can take with your home. You can finally complete those projects you started some time ago or make improvements that you have dreamed about. This is a great opportunity to complete a home energy audit to evaluate your home for changes you can make to lower your energy consumption. From curb appeal to money saving improvements, reinvesting in your home is a great idea.
Pay It Forward
You may have all of your bills paid and no other necessities to spend your tax refund on – kudos to you if this is your situation! Consider paying it forward. This is a perfect time to make a donation to a charitable organization that you hold dear, not to mention reduce your tax liability for next year.
See The World
Summer is right around the corner. This is the perfect time to plan (and pay) for an exciting trip. Even if you don’t have a huge amount to work with, you can set a budget and still have an amazing trip.