April Taxes Bring Spring Cash: 4 Tips for Your Tax Refund
You've paid taxes all year and worked hard to file your tax return properly. Now, the fun part! Depending on your tax situation, you may be receiving a tax refund. While the size may vary, the average American got a $2,873 refund last year. So, what should you do with that money? While it may be tempting to go on a quick shopping spree, here are four ideas on how to make the most of your refund instead!
Pay off bills
It may not sound that exciting, but one of the best places to put your tax refund is straight towards your existing bills. Paying off bills quickly will help you prevent any additional damage to your credit. Focus on bills that directly impact your day-to-day life, like heat or electricity, first. If you have money left over after paying off those essentials, focus on debts that have high-interest rates like credit cards. The interest on these bills results in you paying more and more each month, so paying them down will help you keep your monthly bills more manageable.
Put it towards your savings
Having a solid emergency fund can be critical to preventing you from going into more debt when you run into an unexpected expense from a health issue to needing to fix your car or washing machine. If you don't have any accessible savings, your tax refund is the perfect way to start this pot of savings. If you already feel comfortable with the amount of money in your emergency fund (most experts recommend having enough to cover several months of expenses), then it's time to think about other savings options. If you don't have one, learn about your options for starting to save for retirement!
Take a vacation
Yep, you're reading that right! Taking a vacation can be a smart way to spend your money! Everyone deserves a break and taking some time away from work can keep you fresh and ready to rock when you return. While going into debt for a vacation isn't a great idea, paying for a vacation you can afford with your tax refund is reasonable. Make sure to plan your time away in a budget-friendly way, including shopping around for flights and lodgings!
Make some home improvements
Not only will spiffing up your home make your day-to-day life nicer, but it can also increase the value of your home, making it a good investment. Here are a few ideas you might think about:
Redoing your bathroom! Homebuyers love bathrooms, so if you're thinking about selling any time soon, it can be a great idea to put in new tiles, a nicer vanity, or even something as simple as putting in a nicer showerhead.
Build out your outdoor space! If you're lucky enough to have a backyard, with summer just around the corner, get creative about how you might use it. Consider building a fire pit, putting down a stone path, or investing in some new plants, trees, or bushes.
It may not be as fun, but consider any work that needs to be done on essential parts of your home, from a new roof to servicing your water heater.
No matter what you do with your tax refund, it's important to be smart about it. Contact us now if you're interested in using your tax refund to start getting your credit back on track!