The Best Ways to Spend your Refund

Best Ways to Spend your Refund

If you're one of the lucky ones who’s granted a tax refund from your state or government, you probably already know what you plan to spend it on. One thing to consider however, is if your plan get you ahead financially. A majority of Americans plan to use their refunds to set up their financial futures.

Things to Consider

If financial success is what you’re after, it all starts with a plan. First, take a look at your current savings (both personal savings and emergency). If you don’t have an emergency savings account started, consider using your tax refund to start one!

Second, I would see how much debt you have and where you have the most. Consider all types of debt; credit cards, car loans, and student loans among others. If you can pay down even a small about of that debt, or even just make an extra payment that month, you’ll be in a better position than you are currently.

Another thing to consider when it comes to your debt is refinancing! By refinancing your student loans with Earnest, not only will you be saving yourself money, but you’ll be able to pay them off faster!

Things to Avoid

-Spending on everyday expenses: If you’re planning to use your tax refund for everyday expenses like groceries, you may want to take a step back and see if you’re living outside your means. Consider the envelope method, setting aside spending money each month for these everyday expenses. An example would be checking out the top rated pellet stove options for this year. This would be an expense that you may need in the future anyway and could be a good option for spending your tax refund on.

-Over indulging: While it’s suggested you spend a small amount of your refund to treat yourself, remember it’s only a small amount. As a guideline, only spend 5-15% of your refund on yourself. You may also be interested in best stainless steel cookware if you are looking for a bit of indulgence without over-doing it. It is important to indulge just a bit in order to avoid a large scale overspending spree that leaves you in the whole. Be wise.

-Frivolously spending: Spending your refund before you’ve actually received it can lead to spending on things you don’t really need. Remember, make sure you have a plan! Instead of getting your refund directly deposited into your bank account, opt for the paper check. This way, it’s much easier for you to wait for it to arrive before spending it. Also, if you've given up and would like to enlist in maid cleaning services, you should check out the link prior, do your research, and look into professional cleaning that can get the job done for you! In addition, carpet cleaning can be a nice way to spend your tax refund because you get the refund of refreshed carpet that will serve your household and your guests very well in the future!

-Acting like you’re an ATM: f asked, try not to lend money from your tax refund to your family and friends. Of course you want to help those who are close to you, but it’s important to put your financial future first.  

If you’re looking for more guidance on how to utilize your tax refund, check out the guide below:

Best Ways to Spend your Refund

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