Are you excited for your income tax refund? Do you have any ideas on how you’ll use it? One thing’s for sure, you won’t be spending any of it on tax prep fees! Refund season is an exciting time that many people look forward to year round. Whether you decide to spend or save, here are some ideas on how to put that refund to good use.
Build or add to an emergency fund
If you get a significant amount of money back, now would be a good time to start an emergency fund, or add to it if you already have one. You never know when your tire could blow or your pet could get sick. These expenses could take a toll on your monthly budget, so having money set aside for these unforeseen events is very smart.
Pay off debt
According to CNBC, 8 out of 10 Americans are in debt. Whether you have a mortgage, student loans, or credit cards, it’s important to decrease and, eventually, eliminate your debt. Depending on how much debt you have and how big your refund is, you could make a significant payment to reduce the amount you owe.
Plan a vacation
Vacations can get pricey. Look up places you’ve always wanted to go but couldn’t afford. Purchase your airline tickets now or put a down payment on a cruise. Don’t put off your dream vacation anymore!
Invest in your career
You know what they say, “it’s never too late to go back to school,” and it’s true! Many people don’t discover what they’re passionate about until after college anyways. Take classes online or at a local university. If the courses you’re taking further your knowledge of your existing profession, your company may even help you with the expenses!
Start a side business
If you’ve always wanted to start up a small side business like a shop on Etsy, now is a great time. Use some of your refund to help you with start-up expenses like a sewing machine, wood, or other craft supplies.
Save for big events
Many of life’s big events come with expenses like family birthdays, upcoming trips, or wedding planning if you’re engaged. Even if you’re a member of the wedding party or simply attending a wedding, expenses like travel, attire, and gifts can add up. Planning for these costs will save you from lots of stress.