As a single mom I’m always worrying about my daughters future. Normally, when I recieve my tax refund I plan ways that my family can enjoy the money. Sometimes we take shopping trips, buy things we’ve wanted all year and pretty much just splurge. As I get older I have been thinking about way I could put this money to good use so that it may benefit my family as times goes on. Upon doing a little research I found the top ten ways that income tax refunds can be spent wisely yet still benifical.
(#1) Pay Down High Interest Loans: When we run out of cash on hand sometimes we use that credit card to hold us over until payday. We make payments over and over yet the interest keeps adding up. So by paying off the creid cards before making investment decisions would be a great idea to do with your income tax refund.
(#2) Fund Your Retirement Account: A high percentage of Americans have no money invested for their retirement. If your job doesn’t pay in on your retirement then how else will it be funded when that time comes? Consider making contributions to an IRA. You don’t have to put your entire Income Tax their, but maybe just a specific amount.
(#3) Invest: If you invest $1,500 in the stock market, over 30 years at 12% (the 30 year market average) you’d have $53,924. I advise you to do research first before making an investment decision here.
(#4) Open An Emergency Account: If you don’t have one of these accounts then what is your plan if you are sick and out of work? How will the bills be paid and who will take care of your family? If you have money put aside in an emergency account for a total of 3 to 6 months living expenses then you can be at ease if something ever happens.
(#5) Pay For Repairs: Repairing expensive things now will save you dollars later. While you have the money to take care of why not? Why wait until your back to pay check to pay check to fix that leaky roof? Why wait to count to the penny to get good tires for you transportation?
(#6) Make Extra Rent or Morgage Payments: By paying ahead on these it can give you time to put away a few paychecks. You’ll be able to get ahead and not be month to month.
(#7) Start Personal Endorcement: Invest in your emotion, physical, intellectial, or career growth. Maybe you want a gym membership, or to take cooking classes, or maybe you want to climb your career ladder with a couple college courses. Here would be the time to invest in that.
(#8) Donate To Charity: Support a cause that is important to you. Also a portion of the donation is tax deductible on your next years tax return.
(#9) Open A 529 College Savings Plan: An average 4-year college tution costs $10,000. With a 529 plan it works like a Roth IRA and withdraws completly tax free for higher education purposes.
(#10) Plan A Vacation: Do something you have been dreaming about. Money is to be enjoyed as well as earned, saved and invested. So if your dream is to lay on the beach then go for it.
** I hope that this was helpful to some. If you don’t mind please take the poll at the top when you have the chance. Thanks so much for stopping by. **