When I was in an accounting practice, one of my favorite moments was announcing the tax refund for the clients. They were happy and always shared with my ways to use their refund! Most of them used that money to pay for their summer vacation, some of them debts, others towards their mortgage and some towards health expenses!
Everyone was anticipating how much tax refund they will get! With reason! With all the family tax breaks, a household could get between $1,000 and $3,000 refund! Of course those are rough estimates but most of the clients I did taxes for were getting those returns. This is quite a neat sum! How can someone use it wisely and optimize it?
Smart ways to use your tax refund
I think it’s a great idea to come up with some plans on how to use your tax refund wisely before the money hits your bank account. That way, you’re not tempted to spend it on items you don’t really need…or even want. Sometimes when we have extra money and no plan, we tend to go a little crazy with it!
- Take care of your debt
It is a good idea to use your tax refund to get rid of that annoying debt or your credit card loans. Some of these loans carry a higher interest rate and can reach astronomical sums if you are not careful.
- Go for a home energy audit
Home energy audits are a very good way to use your tax refund, I feel. You not only save on energy, but also money in the long run. The audit will show you as to where to add insulation and where to seal up leaks.
- Invest in life insurance
If you still have no life insurance coverage for you or your family, it is time to take it seriously. Simply make good and sensible use of that tax refund to get term insurance and keep your family safe.
- Sort out your mortgage
Another good use of tax refund cash is to pay some extra amount for your mortgage. Placing a chunk of money toward the mortgage means making a good difference to our mortgage and getting rid of it sooner.
- Save more for your retirement
Speak to a financial adviser and see how you can use your tax refund money to take care of your retirement and make you feel more secure in the golden years.
- Your child’s college education
Put the money away for your college education of your child. Every dollar counts during that stage as you take care of college bills and other expenses.
- Enjoy the money
Well, if you have most of the above points taken care of, there is no harm in enjoying that refund and prepay for a vacation. Stash your refund in a good holiday package and enjoy a great trip with your family.
I hope the above ideas and tips on how to use your tax refund proves to be useful and informative. The aim is to bolster your personal balance sheet and make some good use of that refund.