12 Feb Smart Uses for Your Tax Refund
Practical Ways to Invest Your Tax Return
We are on the countdown to tax day – April 15. Nothing brightens a cold winter like receiving a little money back from the government. We are all only human and splurging a little with the refund always sounds fun, but a check from the IRS offers most of us the opportunity to do something a little more financially meaningful. Take a moment to think about what is most important to your financial future before you spend your return. Here are a few smart ways to use this year’s tax refund:
- Buy your financial freedom: Credit card and other unresolved debt is the biggest drag on your bottom line. It can be exhausting to carry around this debt especially if you have interest compounding month after month. This is the best investment you can make with your tax refund bringing a guaranteed return on your money equal to the interest rate you were paying to your lender.
- Save for a down payment on a home or any other big-ticket item: To ensure you don’t spend this money accidentally, keep the money separate from your regular bank accounts.
- Save for unexpected expenses: You will rest better knowing you have cash on hand to cover any unforeseen issue such as a burst pipe or a nail in your car tire. Ideally, you should build your emergency fund to cover at least three but more likely six months of worth of expenses.
- Give your home an upgrade: Whether you are making a home improvement that will upgrade your daily experience like installing new windows or replacing an inefficient appliance this can help increase the value of your home and improve your enjoyment of it.
- Invest in yourself: You are your biggest income-producing asset! Consider using a portion of your refund to invest in your own human capital. This can be anything from learning a new skill to a work-related conference or membership in a professional organization. This is an investment that can pay off for years to come in larger paychecks and greater job stability.
If you are looking to purchase a home, please reach out to one of our local mortgage planners at Fairway Independent Mortgage of the Carolinas. They can discuss your financial options with you. At Fairway, we are truly interested in providing a mortgage experience that will set the stage for your financial future. Our goal each day is simple – help people do better in life. Let us change the way that you think about mortgages.