The tax refund that you’re about to receive may seem like found money but actually it’s your money; Uncle Sam’s just paying it back.
People often take it as a large payday, but the best way to waste it is by spending it with no clear intention or direction before it hits the bank.
Use these tips to make the most of your tax return and ensure you’ll see more of it throughout this year and the next.
Invest in your Financial Freedom
Is there a course you need to take, online challenge you can join or book you need to purchase to learn more about what it means to acquire wealth this year? Do you need to hire a financial coach (first name: Tonya, last name: Rapley), find an accountability partner or additional service to help you realize and embody your goals?
Reinvest in your education so that you can empower your entire being and take the actions you need to create the results you desire.
Rebuild your Emergency Fund or Establish One
Take a portion of your refund and put yourself first. Aim at placing three to six months of expenses in a high interest earning account at a bank that can’t be easily accessed or in an account at a bank that’s primarily online.
You accrue much interest on the account. The key is to create the fund, build on it with every opportunity you have and utilize it in the event of a real emergency.
Lighten Your Load
Making the minimum payment on your credit card may not seem like a big deal but over time, financing your debt can double or even triple the cost of every item you purchase with the plastic. Make some headway on your credit card debt and contribute more to those cards with higher interest rates.
Take Care of Your Future Self
Stash your refund in a Roth IRA, 401K or another tax deferred account and gain a tax deduction on next year’s tax return.
Before investing in any of the above mentioned accounts or tools, be sure to do your homework, use your resources to the best of their ability and compare rates based on necessity, short term and long term goals.
Be mindful of any restrictions or requirements when opening accounts and feel free to ask questions and take the actions you need to, no matter where you are on your journey to financial freedom.
Once you have explored your options, let us know what strategy you will implement to make the most of your tax return this year in the comments below!