As we draw closer to the end of tax season, you may be considering how to make a few last minute changes in your financial life that could make a big impact. One thing that is worth considering is to put your tax refund to good use by making it work for you. While not everyone has this option, many do receive a tax refund hat will help be a great relief to their debt situation.
I know that your tax refund is essentially money you loaned to the government by over paying but while most people don’t realize this–the refund is a great way to get ahead.
When we got our tax refund I used to have the mindset that I should go buy a new purse or take my kids on a shopping spree at Toys R Us. It was when we were living on unemployment and didn’t have a ton of money to go around that I realized those things were no longer important and we needed to be smarter with our money. Here are five ideas on how to make your tax refund work for you:
Pay for holiday presents with your refund. It is a great way to grab a few gifts without dipping into your regular household budget money. This can also mean a bit nicer Christmas shopping list for some.
Pay off one smaller debt. We all have that one smaller bill that lingers around annoyingly. Use that return to pay off that one little debt that you are always trying to get rid of. This may even be the time to consider negotiating for a lump sum payment in some cases.
Put into savings for your emergency vehicle fund or general savings. Make that money become a back up plan should you have an emergency come up. Most returns are enough to easily create a small vehicle fund or put a nice addition into your savings account.
Make a small investment. Put that money to work for you by making a small investment in a stock you have your eye on. Even $100-$200 in quality stocks can easily double over the course of a couple of years. A great choice to go toward your retirement fund.
Pay ahead a payment on your home, car or other large monthly expense. This is one of those options that is just handy and creates a bit of wiggle room in your month to month budget. Paying ahead a month on your home, car or other large monthly expense can give you a bit of relaxation in the week to week budgeting. Don’t change your budget, simply feel a bit less stress knowing you are just a little bit ahead.
Rather than blowing a refund on frivolous things, take the time to turn your tax return into debt relief Pay ahead, pay down or pay off your debt. Invest in things that will create funds for your future. Put that extra money to good use this year.