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4 Thoughtful Things To Do With Your Tax Refund

March 26th, 2014 · No Comments · Taxes

by Staff

4 Thoughtful Things To Do With Your Tax RefundHow many times have you had big plans for your tax refund only to see it dwindle down to nothing, spent in ways you cannot even recall? This year can be different. All it takes is the right action behind a thoughtful intention.

1) Build your savings.

Whether your current savings amounts to several accounts for multiple goals, or a jarful of change on the kitchen counter, your savings can always benefit from a boost.

  • Emergency fund. If you don’t already have at least three months in emergency savings, earmark this category for your refund first.
  • College savings for the kids. Fingers crossed they get full scholarships, but considering what student loans do to graduates these days, you can’t afford to take the chance. Bulk up your kids’ college fund every chance you get!
  • Continuing education fund for you. A new certification or degree could boost your income more than you know. Find out and follow through.
  • Vacation savings. Have a trip coming up or one you’d like to plan? Enjoy it all the more knowing you’re funding it up front with cash instead of charging it to a credit card you’ll end up paying on for months to come.

2) Pay down debt.

If paying a bill sounds like the last thing you want to do with your tax refund, think about all the money you’ll be saving on interest fees in the long run.

  • Payday loans. Hopefully, you don’t have one, but if you do, by all means put every dime of your tax refund toward paying it off. As you may already know, payday loans create a vicious cycle of borrowing that can feel next to impossible to end. Take this opportunity to make it happen.
  • Credit cards. If you have a balance on one or more credit cards, use your refund to pay them off or, at the very least, take a nice big chunk out of the one with the highest interest fees.
  • Mortgage or auto loans. If you’re looking good with other debt, think about sending in an extra payment on your home or car loan. You’ll shorten the life of the loan and, in turn, interest owed.

3) Make repairs and improvements.

Are you tired of wasting time, money, and energy on things that don’t work or run just right? Enough already!

  • Car. Get that work done you’ve been putting of too long — the brakes fixed, a tune-up, new tires, or even something as simple as an oil change.
  • Household. What’s driving you crazy or wasting money around the house? Broken dishwasher? Leaky faucet? Drafty windows? Look into taking care of it.
  • Home office. Slow computer? Broken printer? Uncomfortable chair? Invest in something that will make your work-at-home life faster, easier, and more enjoyable.

4) Splurge on (a little) something.

Part of being responsible with your money is making sure you have fun with it. Fulfill the need to splurge a little on something unnecessary, but inexpensive. We’re talking no more than 10 percent of your tax refund amount. No need for a list of ideas for this one. I’m sure a thing or twenty comes to mind.

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