The 7 Best Things To Do With Your Tax Refund

X (Twitter) Facebook Pinterest LinkedIn Flip it

This year’s tax refund is either on its way to your bank account or already sitting there, ready to be allocated into your financial future. Here are the seven best things you can do with your refund to make the most of it.

1. Create Your Emergency Fund

An emergency fund is one of the most vital aspects of a healthy financial system. If you don’t have one because you’ve been struggling to save, then maybe this is your sign to take most of your tax refund and put it away to handle the unexpected life can bring.

2. Pay Off Debt

This is arguably the best thing you can do with your refund since paying down your debt prevents you from spending more on interest. Anyone with debt who isn’t sure what to do with your tax refund will benefit from putting some amount aside for paying off a credit card or loan payment.

3. Reinvest in Your Home

Homeowners, this is your reminder that those repairs or maintenance you’ve been putting off because they’re too expensive are finally within reach with your tax return. This is another worthwhile investment that can save you money by lowering the chances of you needing to pay for emergency repairs.

4. Start a Business

This might sound like a tip out of left field, but if you’re already thinking about it, what better way to use your tax refund than seed money to start the business of your dreams? It could be just what you need to completely transform your life, so consider taking the plunge if your business idea is already fully baked and you’ve been waiting for a windfall like this.

5. Start a College Fund

Those with little ones are probably nervous about how they will pay for secondary education. They say the sooner you start, the better, and there’s no sooner time than the present. If you already have the college fund going, then this is an excellent time to add more to it to get more out of it.

6. Keep It Out of Sight in Savings

If none of the other things have spoken to you yet, and you’re still obsessed with the idea of buying a boat or something, then this tip is for you: put that money somewhere where you aren’t tempted to spend it all. There’s nothing wrong with using some of your refunds to have a little fun. But if the point is to meet your financial goals, lock the money up and throw away the key while you still can.

7. Invest

This probably isn’t the wisest thing to do with your refund if you don’t know what you’re doing. Still, if you’re confident that you’ll be making measured decisions and not wasting it all away, investing a partial amount of your refund in stocks can be a financially savvy way to make your money work for you.

Plus, if it goes well, you’ll have a lot more money to do everything else on this list, even if we can’t in good conscience recommend doing it over something like paying off debt.