8 smart ways to spend your Tax Refund ?
If you are one of the lucky ones who will receive a nice check from Uncle Sam then you get to make some decisions on what you do with your refund. According to the agency, “8 out of 10 filers have qualified for a refund in the past few years and the overall average refund has been about $2,800”. There are some financial gurus who say save and some who say pay off debt. I say with $2,800 you have some decisions to make!!!
- Pay off or pay down your debt - Look at any revolving credit cards you might be carrying a balance on. If you can pay off the entire credit card then high five to you! If not then look at your credit cards and see what account is charging you the highest interest. Sometimes your credit card company can be charging 18% and even more. Paying down or paying off does not feel as fun as splurging but I can promise that your future FICO and your future self will thank you for it!
- Create a rainy day fund - If you don't already have an emergency fund then it is time to start. 3 out of 10 Americans have no emergency fund in place, according to Bankrate Survey. You never know when there will be a day when you need to lend someone close to you some cash or when you will need a little cushion. A good goal amount is 3 months worth, in other words if you were out of a job could you rely on your rainy day fund to pay your bills for 3 months.
- It takes money to make money ? - Invest your return into an aggressive savings account. I recommend reaching out to your wealth advisor and doing a financial analysis to determine what is right for you. But if you have a little extra to add to your savings account then make it happen and watch it grow.
- Pay for your doctor or dental checkups- Depending on your insurance plan you might need to come out of pocket for some upcoming visits or procedures. Set the cash aside so you are not putting it on your credit card and having to make payments. Or maybe you are ready to go forward with some cosmetic procedures that your insurance does not pay for teeth whitening or even laser hair removal. Ps. Laser hair removal is the best!
- Treat yourself to a piece of jewelry - Girls love jewelry and with the average US return amount around $2,800 you can find something that you will cherish forever. When I was 22 I treated myself to a diamond ring that I wear on my right hand. Every time I look at it makes me smile, but more importantly, it reminds me of the hard work I did to earn it and to keeps me motivated to keep the focus.
- Donate - It is a gift to be able to give. Maybe you have a charity that speaks to your heart. Every dollar counts and non-profits are always grateful for donations. If you don't have a charity in mind then spend some time researching so you feel comfortable how your donation will be spent.
- Wheels up - Pack that suitcase and hit the road. We are already in the second quarter of the year and it might just be the right time for you to get out of town with your girl friends or your lover and relax. According to a happiness survey, experience brings more joy than material possessions. Don't forget to pack your sunscreen.
- Go back to school - Going back to school to take a class that you want to take can be great for you. It can either be something to improve your career, maybe it is a hobby or maybe it is something you have always wanted to explore. Remember the day you stop learning is the day you stop growing.
Enjoy deciding how you spend your tax refund. ? ***Photo by Jessica Proulx