It’s tax season and I’m sure you’re excited to receive that extra sum of money. Perhaps you’ve been eyeing this new pair of shoes at the mall or you want to update some of your furniture. Trust me, I understand the desire to want to buy those other things that you’ve been wanting but there are other ways to spend your tax money that will benefit you long term vs. short term. Therefore, before you get your tax return back, it may be helpful to think about how you can best utilize and maximize this sum of money. Below are 7 things to do with your tax returns instead!
- Use your taxes to pay off some of your debt. Maybe you have a few credit cards that you’re close to paying off or an account that has gone into collections, use your tax returns to get rid of that debt for good.
- Use your taxes to build your emergency fund. It is recommended by financial experts that you have at least $1000 in your emergency fund because let’s be honest unexpected financial costs come up. Now, instead of having to stress and worry about how you will pay for an unforeseen cost, you can rest assured that this won’t affect you as you much because you prepared.
- Use your taxes to invest in yourself. Maybe there was a personal development course or a certification that you wanted to get to help you improve in your side hustle or just in life in general but you couldn’t afford to. Well now is your opportunity!
- Use your taxes to build your sinking fund. A sinking fund is short time savings account for expenses that happen on a yearly basis, like buying Christmas presents or a yearly vacation trip. Having a sinking fund is helpful so that you don’t have to dip into your emergency fund or skip paying a bill.
- Use your taxes to book a vacation! We could all use a vacation, especially during these times. Traveling always has a way of rejuvenating and healing the soul. The great thing about traveling is that you don’t have to spend a lot of money to have an amazing experience. You can take a cruise or travel to a state near you.
- Use your taxes to get ahead on your bills. This will free up your budget and give you momentum to pay off more debt or save more money.
- Use your taxes to fund your retirement by looking at ways that you may be able to invest your money.
How are you going to best use your tax returns? Let us know in the comments section below!