How To Get The Most Out Of Your Tax Refund
Now that the holiday season is over, many are turning their attention to the next big season- tax season. While some have to pay the federal government come tax time,...
Now that the holiday season is over, many are turning their attention to the next big season- tax season. While some have to pay the federal government come tax time, many of us will see some sort of refund. In fact, in 2017 roughly 80% of Americans received a refund totaling an average of $2,895. If you haven't yet thought about what you'll do if you receive a refund, we're here to give you a few great ideas on how to spend it wisely.
1. Purchase non-perishable items. While sometimes it's a necessity to spend any extra cash you have on food and other perishable items, it's difficult to fathom spending thousands without really having anything to show for it. If you don't need to use your refund for every day purchases, consider spending it on home improvements, new furniture, or a wardrobe upgrade. All of these things will last several months, if not years, making them worthwhile purchases.
2. Plan a trip. What better way to spend some extra cash than by making memories that will last a lifetime. It can be challenging to save up enough money to go on an extravagant vacation- and even more difficult to justify spending those funds when they can be used elsewhere. A tax refund is the perfect excuse to get away either on your own or with loved ones and enjoy some much-needed relaxation. Many vacation spots capitalize on the tax refund season by offering special deals and discounts from April-June, which can help stretch your refund even further.
3. Invest it. Maybe you've been considering entering into the stock market but haven't quite figured out how or when. Getting a tax refund is the perfect opportunity to make some moves and invest in the stock market- which has made several strides over the past year. If you aren't sure how to get started with investing, an investment broker can help steer you in the right direction. Current stocks that are expected to see large growth during the next year include Verizon, Facebook, and IBM.
4. Don't spend it- save it. Of course, there's always the option to not spend your refund at all. Many look at their tax refund as a type of savings account. After all, it is your money that you've earned over the course of the year- the federal government is just reimbursing you for what they've taken. If you placed the average refund of $2,895 into a savings account with an interest rate of 5%, you'll have accumulated $144.75 in interest by the end of the year. If you save your refund for 5 years in the same savings account, you'll have earned nearly $800 in interest.
There are so many possibilities when it comes to using your tax refund. If you don't get to utilize one of these options in 2019, remember that tax season comes around each year so you can keep these ideas in mind to use later on.
1. Purchase non-perishable items. While sometimes it's a necessity to spend any extra cash you have on food and other perishable items, it's difficult to fathom spending thousands without really having anything to show for it. If you don't need to use your refund for every day purchases, consider spending it on home improvements, new furniture, or a wardrobe upgrade. All of these things will last several months, if not years, making them worthwhile purchases.
2. Plan a trip. What better way to spend some extra cash than by making memories that will last a lifetime. It can be challenging to save up enough money to go on an extravagant vacation- and even more difficult to justify spending those funds when they can be used elsewhere. A tax refund is the perfect excuse to get away either on your own or with loved ones and enjoy some much-needed relaxation. Many vacation spots capitalize on the tax refund season by offering special deals and discounts from April-June, which can help stretch your refund even further.
3. Invest it. Maybe you've been considering entering into the stock market but haven't quite figured out how or when. Getting a tax refund is the perfect opportunity to make some moves and invest in the stock market- which has made several strides over the past year. If you aren't sure how to get started with investing, an investment broker can help steer you in the right direction. Current stocks that are expected to see large growth during the next year include Verizon, Facebook, and IBM.
4. Don't spend it- save it. Of course, there's always the option to not spend your refund at all. Many look at their tax refund as a type of savings account. After all, it is your money that you've earned over the course of the year- the federal government is just reimbursing you for what they've taken. If you placed the average refund of $2,895 into a savings account with an interest rate of 5%, you'll have accumulated $144.75 in interest by the end of the year. If you save your refund for 5 years in the same savings account, you'll have earned nearly $800 in interest.
There are so many possibilities when it comes to using your tax refund. If you don't get to utilize one of these options in 2019, remember that tax season comes around each year so you can keep these ideas in mind to use later on.
| About The Author |
|
Gerald Woods is Director of Operation at Solace Connect, LLC based in San Antonio, TX. He has written many articles on various topics dealing with onli |
