5 Ways to Make Your Income Tax Refund Work for You

By , Posted on Apr 15, 2016
Budgeting Debt. Saving Money
Budgeting Debt. Saving Money

Make Your Income Tax Refund Work for YouFor those that receive refunds, tax time often feels like the adult equivalent of Christmas. For most Americans that refund check tends to burn a hole in your pocket, and you can’t help feeling the urge to splurge a little. However, careful money management at this time of the year can be a very smart financial move. Here are a few wise ways to use your tax refund.

Cut Down that Debt

Using your refund money to pay off, or at least pay down, any existing debt you have is one of the best money management moves that you can make. Because the interest rates tend to be so high it’s smart to begin with credit card debt. Paying off a car loan is also wise, but make sure to double check that your loan doesn’t come with any early payment penalties.

Build up that Emergency Fund

“It won’t happen to me,” is an all too common (and more often than not, incorrect) approach to maintaining an emergency fund. Putting back between three and six months’ worth of income may not be doable at any other time of the year, but tax season is the perfect time to begin building that savings. Even if you aren’t able to put away that much money, every little bit counts. You won’t regret down the road when you run into car trouble, or your air conditioner suddenly kicks the bucket.

Invest Your Refund

If you don’t have debt piling up, and your emergency fund is already in good standing, then one of the next best things you can do with that extra money is to invest. There are online brokers that are efficient and even affordable. Do your research and you may be able to get a pretty good return on that tax return money.

Give Your House a Little TLC

Your home, especially if you own it, is a pretty major investment and a huge part of your life. Take some or all of that refund money and invest in new paint, cabinets, or replace some of your old appliances with more energy efficient ones. Depending on what improvements you choose to make, you can easily improve your quality of life and maybe even cut down on your electricity bill.

Invest in Yourself

If you’ve had your eye on a college course or you want to get more proficient with Microsoft Office, then now may be the perfect time to learn a new skill. Using your tax refund to invest in yourself can be a great thing. Also, if you choose to learn a skill that’s relevant to your job then it could even aid in your career.

Of course splurging on unnecessary items with your tax refund sounds like the most fun. However, consider making an investment in the future of your family and yourself. It’ll last a lot longer and be much more beneficial than the newest gaming console.

If you find yourself struggling with debt or would like to find out about becoming debt free, call Debthelper.com at 800-920-2262, or visit @ www.debthelper.com.

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