Tax season is officially upon us. A tax refund may feel like free money and it can be tempting to spend it on a vacation or big ticket item. Instead of splurging your tax refund this year, here are five ways to make your refund count.
Pay Off Some Debt
One of the smartest ways to use your refund is to pay off debt with interest rates. The simple act of paying off debt could save you hundreds of dollars in the future.
Save for Your Future
Yes, I’m talking about IRAs and 401ks. You can contribute up to $5,500 to an IRA (or $6,500 if you’re over age 50). Stop making excuses about not having the money to save and invest your refund. Trust me, your future self will thank you.
Start an Emergency Fund
One surprise major expense can send you into debt if you aren’t prepared. An emergency fund can help alleviate surprise financial strain. Your mother always told you to save for a rainy day, your refund could a great way to get started.
If purchasing a home or car is in your future, setting aside this refund can ease some of the financial burden. If you already have a mortgage or car payment this could be the perfect opportunity to make an extra payment to put yourself ahead.
Your refund could be the perfect reason to call your financial advisor. Stocks, mutual funds and fixed annuities are great options if you don’t have an immediate financial need.
There will always be a list of wants. It’s time to take financial responsibility and use your tax refund wisely. What will you be using your tax refund for this year?