Now that the tax deadline has come and gone, some of us have been left a little bit richer for Uncle Sam’s yearly visit. That extra cash is, no doubt, burning a whole in your pocket, and the temptation to run out and purchase that new tablet or big screen television is no doubt raging inside of you. Before you rush out and reward yourself for a year’s worth of hard labor, however, we urge you to read our newest article, where we discuss some smart ways to spend your tax refund.
How Should I Spend My Tax Refund?
While spending your money in a responsible way may seem boring and un-rewarding, the truth is, it could actually bring more joy to your life and reduce your stress levels. Don’t believe us? Read our advice on good ways to spend your tax refund dollars and become a true believer!
Pay Off Credit Card Debt
Reducing debt – especially high interest debt like that associated with most credit cards – is a no-brainer way to spend your tax dollars. Not only will it lower stress levels (being in debt is one of the leading causes of stress in a person’s life), it also is a great way to reduce your monthly overhead.
If you have multiple credit cards, we suggest you pay off the one with the highest interest rate first, then take the payment you would normally send to that card and apply it to the next highest interest rate credit card you have. Following this simple formula, you can quickly pay off any debt you have and free up some extra cash each month!
Pad Your Retirement Fund
Another great use for your income tax refund is to add it to you retirement fund. If you are paying less than your employer’s matching requirement, consider adding the money to your 401k plan. As an alternative, you could also start an IRA with the money. Both are great options and your future self will thank you for the wise decision!
Take Some Courses
Speaking of investments – one of the best ways to invest in your future is to pour efforts into the thing that earns you the bulk of your income in the first place: your career. Taking courses to expand your skill-set or getting certified in something related to your career are both excellent ways to keep yourself relevant, and could earn you a raise or promotion as well. As an added bonus, those new skills will look great on your resume should you decide to seek greener grass or your company has an unexpected downsizing.
If you are all paid up on your debt and your retirement fund is looking well, you could always spend your income tax refund doing something fun. Work and life can be stressful, and after all, what good is earning all of that money if you don’t have a little fun? A weekend getaway, a small shopping spree, or a much deserved vacation are all reasonable and may be what you need to recharge your batteries.
Finally, there is nothing that says you can’t use your tax refund wisely and have a little fun at the same time. Another option is to take the money the IRS sends you and split it in half. Put half in a “rainy day” savings fund and treat yourself with the other half.