Finance is Fun: Ideas for Your Tax Refund
For this week’s Finance is Fun, Marion Syverson was in to talk about ideas for your tax refund.
Here are Marion’s suggestions for what you can do with your refund.
Why are you getting a refund – If you regularly get a tax refund you are lending money at zero interest to the U.S. government. Do you think bureaucrats are the best at managing your tax dollars? You might consider adjusting your withholding to give yourself more money each paycheck. It’s like a raise. You can use the money better than the IRS.
Your budget – you have a budget, right? If not, now would be an ideal time to set one up. In doing that you can see the areas in which some of this money might be best used. We have some ideas.
Pay down/ off debt – If you are paying 9, 18 or even 29% on credit card debt, paying that down or completely off would be a great use of your money as it saves interest costs that really add up.
Emergency fund – perhaps you need to replenish or begin an emergency fund. You know, no amount of savings can save you from possible trouble or alleviate every situation. But if you have an emergency savings account, you will have something to help in the event things break on the car, someone an unexpected item, or things break around the house. Even a small amount is better than no amount.
Retirement – Do you need to boost your retirement savings and are you eligible for adding to your retirement account? Now is a great time to add a bit more to that pot, so that in retirement, and with the compounding that years may bring to your investment (past performance is not indicative of future results), it will hopefully be a brighter time when you finish working.
Vacation – what about pre-paying a fun vacation for the family? Even if it’s one night away camping, having something great to look forward to will boost your spirits. And to have the expenses covered will make you sleep well.
Home- Are there updates or changes that can be done for less than $1,000? Sure there are! A fresh coat of paint, new bathroom fixtures, replacing a window or two, to more energy efficient windows, even a new kitchen backsplash are all great ideas that I found online with a simple query. I’m sure you can come up with many more great ideas.
Give – Certain times of year make us more aware of practicing charity. Some of us practice all year long. But if you have enough for yourself and your family, why not add some to the coffers of the many charitable organizations in your area, from the food pantry, to the library, to the charities for illnesses and the needs of kids. That is the kind of spending that helps others and warms your heart for a very long time.
You thought it was just a little extra money. But these tips can help upgrade your life all year.