It’s the time of year when CPAs are buried under a bunch of tax documents while the rest of us are planning a Spring getaway we can pay for with our tax refund. It is easy to spend a tax refund on things like a vacation that you typically don’t have the money saved away for, but here are some other ways to spend and invest your tax refund whether it is big or small.
SPEND IT
- Pay bills – This is not always the most exciting way to spend your tax refund but paying off credit card debt or loans is always worth it as you avoid having to pay those annoying interest charges.
- Relax – Take a stay-cation and spend your refund on the things in your hometown that you never have the time or money to do.
- Shop – Upgrade your wardrobe.
- Donate – Donate to a charity, animal shelter or non-profit.
INVEST IT
- Add your refund to your emergency savings and/or fun money account.
- Invest in your future with a Traditional or Roth IRA – Enjoy tax breaks now with a Traditional IRA or tax breaks once you retire with a Roth IRA.
- Invest in your children’s future – Setup a 529 plan or put your refund money into a savings account for your children.
- Invest in your home – Making upgrades to your home isn’t cheap but is well worth it as it can increase the value of your home.
- Invest in yourself – Register for an online course on something you’ve always wanted to learn about.
There are a lot of other ways to invest and spend your tax refund - happy investing/spending no matter what you decide to do!
