Many people will be receiving a refund from their taxes. Often, it is the only time that some people receive a large sum of money during the year. Many times, the money is wasted away on material items that you really don’t need like eating at expensive restaurants or purchasing big ticket items that you truly can’t afford. This year, let’s take a different route. Let’s use those funds to help ease your financial burden or put you in a position to live out your dreams.
There are several things you can do to ease your financial burdens when you receive a refund. Here you will find a list of 15 things you can do with your tax refund.
1. Start a business or side hustle. With a lump sum of money, you can start the business you’ve been dreaming about! Every day is a great day to follow your dreams. Start your very own small business!
2. Invest. There are so many options to invest. One of the most common ways to invest is in stocks. There are many avenues available to open an investment account and start investing. You can open a regular investment account or ROTH IRA, if you qualify, where you can choose and purchase your own stock investments.
3. Start an emergency fund. Having an emergency fund of $1,000 can provide a great deal of security and ease your mind when it comes to financial emergencies. So, if your car needs new tires or the washing machine decides to stop working, having $1,000 set aside for said emergencies is a great thing!
4. Set aside money for living expenses. Unfortunately, we never know what cards life will deal us. It is important to have 3-6 months of living expenses saved for the unknown. If you were to lose your job tomorrow, how will you pay the rent or mortgage next month? In the event of a potential long-term emergency, having funds set aside can make a huge difference.
5. Pay off debt. If you have credit card debt, now is a great time to pay down those balances. There are several ways to tackle your debt woes. When you have the money to pay it down, do it! Depending on your situation, paying down debt can have a huge positive impact on your credit score by lowering your utilization.
6. Open a Christmas account. Start saving for next Christmas. By saving funds throughout the year, you can ease the pressures of Christmas shopping for your family. Now is a great time to open a Christmas account. Even if you don’t have the opportunity to add to it on a regular basis throughout the year, you will have a head start.
7. Open a saving account for your children. There’s never a bad time to start saving for your child’s education or life after age 18. This also sets a great example for your children! There are several options here, you can open a 529 account for education expenses, a custodial investment account where you can purchase your child’s first stock or a high yield savings account. Start with $100 or $500 or whatever is comfortable, then add $25 per week or $100 every month. You will see the savings increase mighty fast!
8. Put a down payment on the home of your dreams. If you are receiving a large sum of money, it’s a great way to add a nice amount to your down payment fund!
9. Pay your rent for 6 months. By doing this, you can free up a lot of cash for the next several months.
10. Pay any past due bills. If you have valid collections on your credit report, now is a great time to address those accounts and pay what you can. Contact the company to see if they are willing to do a pay for delete or even give you a reduced amount if you can pay it all today.
11. Donate to a local shelter or school. With a huge increase in the number of natural disasters we’ve experienced lately, many of the local shelters and emergency response organizations have been stretched thin. Now is a great time to show your support.
12. Invest in yourself! Do you have a license or certificate that you’ve been thinking about, but money was an issue? Well here’s your opportunity to invest in yourself!
13. Invest in your children! Now is the time when summer camps are accepting registrations. For anyone with children, you know that extra-curricular activities can be quite expensive. You can use your refund to register your children in activities for this summer.
14. Start your summer travel account. Are you in need of a nice, relaxing vacation? Or maybe a fun vacay with the kiddos? Connect with your favorite travel agent and put a down payment on a summer or holiday vacation.
15. Purchase gift cards to your favorite stores. Use your refund to purchase gift cards to the stores you frequent the most like discount stores such as Target or Walmart. You can also purchase gift cards for grocery stores and save them for later. If you run into hard times, you have food and necessities covered!!
There are so many things we can do with our money. It is up to you to decide how you want to use your refund. Here’s just a few smart ways you can use your money!