What to do with your tax refund. Sometimes it is hard to save your income tax money or to spend it on things that will really matter. With a little thought and planning, you can use your tax refund to paint a brighter financial picture for your family and also get the things you want. There are several ways to make your tax refund pay off all year.
Paying a Bill for the Entire Year
Paying one bill for the entire year may take up a chunk of money but over the year you will have more money if you are being smart about it. A few examples are insurance. Many insurance companies will give you a discount for paying in full rather than paying monthly. If you rent you can talk with the landlord/property management company to see if they would give you a discount for paying 6 months or a year in advance depending on how big your refund is. The key to paying in advance is to make sure you are getting a discount of some sort for doing so.
Paying Off a Bill That Has High Interest
Paying off an old bill can produce similar results. By paying off a bill with high interest, you are actually saving money and freeing up more money monthly. It could be a credit card bill or an installment account with high fees. Paying it off now, keeps the interest from bleeding your budget dry down the road.
Starting a Business
No matter how small the business, there is always a business start up cost involved. Starting a profitable business with your refund, gives you another source of income during the year. There’s no way to guarantee a business will be profitable, but starting small can sometimes lead to huge rewards.
You may already have the items you need to start a business. It may be just a matter of you advertising your new business venture. For example, you may already have a lawnmower. You may also have neighbors who need their lawn trimmed, but may not have the time to do it. A little advertising or word of mouth recommendations can have you in business in no time.
Invest In Something You Love
If you spend a significant amount of money every year with one company, it may be wise to make a small investment into that company. Buying one to ten shares in a financially healthy company can be a wise decision. You should always consult with a financial planner before making your investment. You could also ad it to your emergency fund or purchase some emergency food and water supply for a rainy day.
Take a Vacation
I am a big advocate of traveling and making sure to get some rest and relaxation. It is important to understand what you want from life and make sure that your money is helping you work towards those goals.
Making smart moves with your refund will take a little planning. By having a financial strategy you will be able to feel the benefit of your tax return all year long. It’s the smart thing to do.