Well, it’s about that time. Tax season is upon us. A time of gathering documents, filling out forms and patiently waiting for the coveted tax refund. If you’re hoping for a large chunk of change, you may already be plotting how you’re going to spend it. You may also have members seeking input on what to do with their refund. While there are many ways to spend it, there are a few strategic routes to take to make your refund stretch and benefit you in the long run. Here are some ways to make your tax refund last longer:
- Start an emergency fund. According to a survey from Bankrate.com, it’s estimated that the large majority of Americans can’t pay for a $500 emergency expense. Setting aside money from your refund will help prepare you for whatever comes your way.
- Pay off debt. Start with your high interest balances first. It may not be as fun as a shopping spree, but you’ll be glad you did in the long run!
- Save, save, save! Earn interest by stashing your refund into a share certificate (commonly referred to as a certificate of deposit). With amazing rates, terms that fit your lifestyle, and funds insured by the NCUA, investing in a share certificate is a safe bet. You can also put your refund towards retirement in an IRA or 401k. The earlier you save, the better!
- Pay for an upcoming expense. Need new tires? How about a new dishwasher? Get ahead of pesky, yet necessary expenses that pop up later in the year.
- Put money towards a college education. Whether it be you, or someone you love, saving for a college education is a meaningful investment. With rising tuition costs, it’s never too early to help cover those college expenses.
Making smart, financial decisions is an important part of anyone’s life, but it’s vital to know when to treat yourself too! Want to know how it’s possible to save and splurge at the same time? Check out The Budget-Friendly Guide to Treating Yourself with Smart Splurges.