Tax day is right around the corner. Did you get a refund this year? Should you save it or spend it? What should you buy? If you’re asking yourself some of these questions, read on. Here are five ideas for spending your tax refund wisely this year.
1. Make a plan.
Before you do anything with that refund, evaluate your financial situation. Do you have debts that you need to pay off? If so, allocate a certain percentage of your refund to pay down that debt. Using eighty percent of your refund to pay down a credit card balance or loan will put you in a much better place financially, and still leave you 20% of the refund to treat yourself.
2. Invest It.
From investing in yourself by building an emergency savings fund, to saving for college or retirement, there are lots of options to make that money work for you.
3. Give your home a facelift.
Tax refunds can vary. Luckily, it can require very little money to give your home’s value a major boost. Here are some inexpensive ways you can easily liven up your living space:
• Under $100: Give your interior rooms a fresh coat of paint.
• Under $200: Replace your old kitchen and bathroom fixtures with shiny, new ones.
• Under $300: Replace the lighting in dark spaces with bright and efficient light fixtures.
• Under $400: Replace bathroom laminate floors with tile.
• Under $700: Add major curb appeal with fresh outdoor landscaping.
4. Buy a car.
Maybe you’ve been dreaming of a shiny, new car. Or, maybe your old clunker is on its last legs. Either way, your tax refund could make a great down payment.
5. Donate it.
Making a donation to charity is a great way to serve others, help those in need, and improve your own sense of self. And, donations to qualifying charities are tax deductible, which can help you save more on next year’s taxes.
Five Ways to Spend Your Tax Refund Wisely