Refunds have been rolling in since February, have you received yours? Whether it’s just hit your bank account or you’re still waiting patiently, check out our tips below on how to put your refund to good use, no matter your financial footing.
5 Ways to Spend Your Refund
Pay off Debt
The best way to put any extra money to use is always to apply it towards debt. Even though it’s not as fun as a vacation, it’ll be the biggest boost to your financial future. The average American household has $5,000 in credit card debt, so this is one high interest problem to tackle. A smart way to go about your debt in general is to either apply it towards small debt first (you’ll be rewarded with the feeling of progress faster) or pay it towards the highest interest first to save the most in the long run.
Invest in the Future
If your debt is miniscule or non existent, consider investing your money. Boosting your retirement by maxing out your IRA contributions would be a smart move, as well as putting away money for your children’s college, or donating to a local charity. If you want to maximize monetary reward, invest in stocks or your portfolio.
Pad Your Savings
Emergency funds are oft-forgotten when a good chunk of cash rolls in. If you don’t have at least a month’s worth of expenses in your savings account, consider putting a portion of your refund away for unexpected circumstances. Moreover, if you plan on making a big purchase soon, like a house, car, or expect a little one, padding your savings can help you reach your goal.
Some of us have to pay estimated taxes quarterly, and it can be a scramble (or worse, you find you can’t pay!). Plan ahead for next quarter by putting your refund in savings. That way, you can carry on with your business without the added stress.
Spend Your Refund Wisely
Whatever you decide to do with your refund, we recommend playing it smart by picking one or two of the above so you’re making an impact on improving your financial situation. And by all means, use some of it for fun!