Tax refunds are in the mail! With the average taxpayer expecting to rake in a refund of more than $3,000, what should you do with the windfall?
IF YOU ARE EXPECTING A REFUND, WHAT IS THE SOLID “EAT YOUR VEGETABLES” ADVICE?
1. Pay down high-interest debt: this is how 40% of Americans will use part of their tax refund.
2. Increase savings: 40% of Americans will save part of it. Ideally, you should aim to have enough in your emergency fund to cover three months of must-pay living expenses.
3. Fund a big-ticket item: Braces. Vacation. Tuition. Down payment on a new car.
WHAT ARE SOME MORE CONSTRUCTIVE WAYS TO SPEND A TAX REFUND?
4. Start your million-dollar portfolio: invest in a stock mutual fund and let it grow.
5. Invest in your “human capital:” invest in yourself – use your tax refund to pay for additional training, tuition, a work-related conference or membership in a professional organization.
6. Upgrade your home: add insulation. Replace the front door.
7. Splurge on an experience: Travel. Music lesson. Art class. Concert tickets.
8.. Buy some good karma: donate to a worthy cause.
IF WE TALK ABOUT THE GOOD WAYS TO USE A TAX REFUND, WHAT ARE SOME BAD IDEAS?
3. A shopping spree
4. Large purchases you can’t afford (ex: new car)
A refund check can really be a great opportunity to get ahead — it just requires a little self control.