Smart Ways to Use Tax Refund

Smart Ways to Use Your Tax Refund

If you’re one of the many that receive a tax refund, here are simple ways you can spend it that can help your overall financial picture, according to a Forbes article by Kristin O’Keeffe Merrick.

While a “refund” is merely an over-payment of taxes from last year, it’s always nice to receive a check in the mail.

Here’s a highlight of the 6 tips from Kristin’s Six Smart Ways To Spend Your Tax Refund article:

  1. Pay Off Your Credit Cards. This is an easy opportunity to cut down credit card debt and spare the woes of compound interest.
  2. Pay Off Some Of Your Student Loan. If you have one, paying off a portion of your student loan will put you in a better position for this year.
  3. Create An Emergency Fund. Was the recent bill from your auto mechanic higher than expected? Worried about the weddings you have to attend this summer? Use your tax refund as a short-term liquidity salve. If you don’t have any savings but are debt-free, use this as a golden opportunity to start one.
  4. Make An IRA Contribution. Were you a late bloomer in the retirement account game? Are you behind on contributions? Do you have an IRA? Use this refund as a chance to open a retirement account and make a contribution.
  5. Invest Your Refund. Use this as an opportunity to start investing your money. You don’t need to have a ton of money to be an investor. If you’re going to do this on your own without an advisor, make sure you do your research.
  6. Take Care of Yourself. Do something meaningful for yourself and your family. After all, that’s why we work in the first place, right?

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