Tax season can be a stressful time, especially when it comes to owing any money back to Uncle Sam. Technically you should strive to even out at the end of the year, that would mean that you paid the right amount of taxes and received the maximum paychecks during the year. For those are getting a refund this year, considering not blowing the money and putting towards a better way to spend your newfound money.
Pay Down Debt
Having any accumulated debt can be the one of the worst things to have when it comes to planning for your future, as a majority of the payment is wasted in interest, so if you are getting a tax refund this year the first thing it should be applied to is debt. High-interest accounts should be paid off too, but if you want to feel a quick sense of an accomplishment, you can pay off an account with the lowest balance.
Build Up Your Emergency Fund
Experts have long advised to have three to six months’ worth of expenses in an account in case of an unfortunate job-loss, or unexpected auto or appliance repair. If the funds are available, then you will not have to put the expenses on a credit card and build up debt that you will not be able to pay back right away, so the ultimate goal would be to keep the plastic put away.
Save, Save, Save
With so many different options now to save that can yield great returns over time that a savings account is not always the best choice, once you have your emergency funds built up to have available cash if needed, saving long-term can now be the focus, as you will thank yourself in the future. You can open an IRA, buy additional stock, or put more towards a 401(k) account, something that will help build your nest egg for you to enjoy during your golden years.
Update Professional Wardrobe
If you have been curbing spending lately, or just have not updated your work attire in years, now may be a good chance to give a fresh look to your wardrobe. After all, if you are looking to continue to rise the corporate ladder, it is best now to climb with faded khaki pants, worn-out shoes, and stained shirts. Usually it is not the advice to blow extra money, but when it comes to your career, in the long-run it could benefit.
Give to Charity
I know that giving your money away may not be at the top of your list of things you want to spend it on, but it does benefit those who are less fortunate. If “what do I get in return” really is on your mind, well if you keep track of your receipt you can write if off at the end of the year so it will help reduce any taxes due, or increase any refund. While you are at it, gather up any clothes and items around the house that you no longer need and donate those as well.