5 Things You Could Do with Your Tax Return Money
I used to feel like my tax return was a gift from the government like I’d just been given free money. But the truth is, you worked for it. When I changed my attitude toward my tax return, I became less inclined to spend it on presents like a trip or a new outfit. Whatever you decide to do, receiving your tax return money invites you to take a hard look at your finances. It may be time to reinvent how you spend and even how you make money.
The short-sighted way to welcome a tax return into your life is to spend it. But even if you decide to not save your tax return money, you can still be thrifty and smart about where you allocate it. Remember what I said before: you’ve worked for this money and should think of it as hard-earned cash. If I were you, I’d make a list of what I need first, like fixing my car or computer. Spending your tax return money in useful ways is encouraged.
Pay Off Your Credit Card
I can understand that you wouldn’t feel much excitement about planning for retirement. Relief can be a subtle feeling, especially when you’re chipping away at an overwhelming sum. But as much as I can empathize with the feeling, paying off your credit card is a must. Having good credit is a ticket to better things, whether that means qualifying for an apartment or financing pretty much anything under the sun. Bad credit is a dangerous slippery slope I wouldn’t wish on anyone.
Sometimes, you need a little help managing your budget and in that case, I recommend using an app like Mint to keep track of your spending habits and billing cycles.
Pay Off Your Student Loans
Like paying off your credit card, dealing with student loans is a great use of a tax return. I like to think of the long game: how much bang can I get for my buck? How much interest is adding up as the years go by? When it comes down to it, facing your debts is always going to be emotionally responsible. Think of it as a game where the reward is your financial independence.
Putting things off, like failing to file your taxes, will come back to haunt you. That being said, if you need to deal with unfinished tax business, you’ll want to seek out unfiled tax return help by Community Tax. May as well file, considering the extremely productive ways you could be using the extra cash!
Put It Toward Your Retirement
Retirement is probably the least sexy topic of all. I’m with you on this one. Saving money for retirement is the longest of the long games. Not only is it not as fun as splurging on a pair of new sneakers or an international getaway trip, but it’s literally decades away. But ask anyone over the age of 50: putting money aside for your retirement is one of the best uses of your tax return. Believe me, thinking ahead will pay off.
It helps to change the way you think about spending. Think about the things you buy in terms of hours of work. Ideally, you actually like your job and aren’t counting the seconds until you can quit. In that case, an extra few days doesn’t matter too much. But if you hate your job so much you’re counting down the days until it’s done, you may want to hold off on spending recreationally and put that tax return money to good use.
There are different ways to invest money. The more common usage of the term applies to the Stock Market, but the truth is it can mean anything, long as I’m putting it toward something I have reason to believe will generate income with time.
You can invest in your career, for example, by going back to school. You can invest in your home by renovating to up the property value for when you sell. You could also reinvent your space and rent out a room or pool house, depending on your state’s laws.
The best advice I can give you is to make your tax return count. If there are debts you need to pay off, use this extra cash responsibly. If you don’t consider the money a gift, then it could be a useful utility to shave off debt, grow your retirement fund, or create a fail-safe in case of unexpected events. You want to be ahead of your finances and tax return money can help achieve this feat.