One of the redeeming factors of having to work hard on your tax filing is the possibility of getting a refund a few months later. Sure, you’ll be spending a lot of money to pay the government but at least some of them is coming back to you, right? Besides, it’s better to pay extra than get in trouble with the IRS for not paying the amount you actually owe.
The best thing about tax refunds is that they’re unexpected money. By using reliable tax services like Jackson Hewitt, it’s easy to feel assured that you’ve correctly filed your taxes so any refund would just be some extra cash. However, this doesn’t mean that you should just spend it willy-nilly. It may be cash that you don’t necessarily need but it can go a long way if you choose to use it properly.
How do you do that? Here are eight good ways you can spend that extra cash you’ll get from your tax refund.
Put it on your emergency fund.
Times can get tough so unless you have an endless source of money, it’s best to have an emergency fund. Experts say that this should amount to three months’ worth of your household’s total income so you won’t find yourself in a pickle in case things take a turn for the worse.
An emergency fund can also give you some peace of mind and ensure that you’re on a relatively good place in your adulthood. With savings of this kind, you don’t really have to worry much in case something unexpected happens to you and your family.
Get ahead on some of your debts.
Since your tax refund isn’t exactly needed, you can also opt to use it on paying off some of your debts. Some experts say that it would be wise to use it on paying off loans with higher interest rates so you can cover more ground faster. You can also opt to use it on your credit card debt to give you some financial freedom.
Put it on your big-ticket item fund.
If you’re planning on paying for a large item like a new car, a grand family vacation, or maybe even a new house, you can also use this extra cash to boost your funds. Since most tax refunds amount to relatively large sums, you can really get ahead on saving money for what you want to get.
Use it as an investment.
Another good way to spend your extra cash would be by investing it. This way, you can let your money grow and you’ll even earn more extra cash on the side.
Spend money on yourself.
Aside from actual bonds and shares, you can also use the money you got from tax refunds on self-improvement. By getting additional training, furthering your studies, joining professional organizations, and signing up for certain types of memberships can also help boost your skills and social standing, investing in them is also a good idea. They can help you grow and maybe even let you earn more in the long run so you should also give it a shot.
Use it on home improvements.
If your home is in need of some repairs or if you just want to upgrade or update some areas to increase its market value, you can also use your tax refund to get some work done on your humble abode. In case you’re already perfectly happy with the state of your home, you can also spend the money on some insurance. These options will help you feel more secure as a homeowner so they’re all worth spending some money on.
Donate it to charity.
If none of the above appealed to you, you can also just opt to give your money to a good cause. There are tons of charitable organizations that will be more than grateful to accept your generous donation to help their cause. It’s also good for your karma, so why not?
Spend it on something that will make you happy.
Some experts will tell you to put your extra money somewhere worthwhile but the definition of this concept varies from one person to another. At the end of the day, it’s really up to you where you’ll find fulfillment in spending your tax refund.
It can be on a new luxury item, a nice mini-vacation, a new tattoo, or even a new set of gadget upgrades – it’s all up to you. As long as you’ll find happiness in the outcome, it can be a very good way to spend your extra cash.