Smart Ways to Spend Your Tax Refund

As the tax filing deadline approaches and returns are almost finished being processed, for those that are getting a refund this year you may start to already be adding items to your online shopping cart in anticipating for when you see funds show up in your account.  Before you go and see the money disappear in the matter of a few clicks and grow tired of the most likely unnecessary items that you purchase, there are plenty you could have done with the money instead.  Sure going on a vacation could be a great escape after the winter weather, feeling the need for long overdue sun, but do not go to the travel sites just yet and get your hopes up.  A long weekend away could be filled with a few lasting memories, but remember your refund is not a gift from the IRS, it is an overpayment taxes that you paid throughout the year, so there are plenty of ways to put your money to good use.

Pay Down Debt

If you are paying balances on high interest credit cards each month then it is a no brainer to put your refund towards paying down debt.  Making low to minimum payments does nothing to get your out of debt, especially with some cards charging upwards of 16% interest, it would take many years to pay off depending on the balance.  It sure is not a fun way to spend your refund, but it is the most responsible.

Use for Home Improvements

Upgrading your home will not only give you satisfaction in your own home, but it also adds value at the same time.  In the interior consider replacing outdated appliances, worn out carpet, or even a fresh coat of paint can give life to a room.  On the outside, planting flowers, adding new mulch, or re-staining your deck will increase curb appeal and outdoor enjoyment for the upcoming summer.

Build Funds for an Emergency

Saving money for a rainy day does not mean going on a shopping spree, but having the funds available to you in case of emergency.  Experts have always claimed to need 3-6 months of expenses in an account in case of broken appliances, unexpected car repair, or worst scenario, a job loss.  This account may not be one were you have to add often, but being prepared is better than being unprepared and having to put it on a charge card.

 

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