10 Smart Ways to Use Your Tax Refund

With Tax Day just around the corner, Americans are scrambling to finish paperwork, searching for last minute deductions, and anticipating their refunds.

When that money arrives, the tendency is to treat it as free money — but it’s not.

It’s your money, and the government has been borrowing it interest free for the last year.

That’s why it’s important to use it wisely. Set aside dreams of lottery winnings. Say no to frivolous purchases. Consider, instead, these ideas for putting your refund to good use:

  • Make Annual Payments 1 of 10
    Make Annual Payments
    Some bills, like insurance, childcare, and gym memberships, offer a discount if you pay in advance. Making an annual payment can not only save a chunk of money at once, but you will eliminate a monthly bill for the next year.
    Photo Credit: Flickr
  • Pay Off Debt 2 of 10
    Pay Off Debt
    If you are working your way out of debt, every extra penny should go towards your pay off plan. Just add your tax refund to your next payment to get out of debt even sooner.
    How to Get Out of Debt
    Photo Credit: Flickr
    How to Get Out of Debt
  • Build Your Savings 3 of 10
    Build Your Savings
    Step one of a good debt management plan is to create an emergency fund. This way, if something comes up, you can pay cash instead of turning back to credit cards. A savings account with $1000 is a decent beginning.
    Photo Credit: Flickr
  • Budget for Gifts 4 of 10
    Budget for Gifts
    Don't let holidays sneak up on you this year. I love to be able to buy things my kids are talking about, as they go on sale. Set aside money for gifts now, and you'll be able to take advantage of deals throughout the year.
    Photo Credit: Flickr
  • Home Improvements 5 of 10
    Home Improvements
    If you're going to put money into your home, focus on items that will increase its value or save you money. Energy efficient improvements like windows, doors, insulation, and appliance upgrades are a good place to start.
    Photo Credit: Flickr
  • Invest 6 of 10
    High yield savings, stocks, bonds, retirement — consult a financial adviser to let your money work for you.
    Photo Credit: Flickr
  • Family Memberships 7 of 10
    Family Memberships
    Purchasing memberships to your favorite destinations is a great way to save money on family fun. Consider purchasing children's museum memberships, bounce house passes, and season tickets your kids will love. You'll be spending the money all at once, then be able take advantage of "free" admission the rest of the year.
    Read more at Inexpensively
    Photo Credit: Indianapolis Children's Museum
  • Save for College 8 of 10
    Save for College
    Use the money to start a college savings plan for your child. A College 529 Plan offers tax advantages and helps you prepare for the high costs of college tuition.
    Read more at College Savings Plans Network
    Photo Credit: Flickr
  • Budget for Back to School 9 of 10
    Budget for Back to School
    While we're not quite to summer yet, it's never too early to start thinking about the expenses associated with the start of a school year. Kids need new clothes, supplies, tuition, and books. Set aside money now, and you'll be able to appreciate the experience of sending them back to school instead of stressing over the costs.
    Photo Credit: Flickr
  • Take a Vacation 10 of 10
    Take a Vacation
    Okay, so this one isn't necessarily a smart financial decision, but when you're working hard, stressing about money, and cutting things out of your budget, a break may be exactly what you need to stick with it. Take some time to enjoy a vacation with your kids or set aside money for regular family days throughout the year.
    Photo Credit: Spencer Sokol

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Photo Credit: Flickr

Article Posted 4 years Ago
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