Getting a sizeable tax refund this year? If you are, it’s likely you’ll be faced with a familiar predicament – do I save or do I splurge? There’s nothing to prevent you from doing both.
If you’re looking for specific ideas on what to do with your refund money, here are some to consider:
- Use a portion or all of the money to pay down credit card or other debt.
- Create or add to an emergency fund that can be used for unexpected expenses, such as car repairs or replacing a broken-down appliance.
- Open or add to a Roth IRA. And you can also open a Roth IRA for your child. Children are eligible as long as they have earned income.
- Upgrade energy-draining, outdated household appliances with new energy-efficient models. It will help you save on energy costs in the long run.
- If you’ve been putting off a visit to the doctor or dentist because you couldn’t afford it, use some of your refund money to take care of yourself and your well-being.
- Open a college fund for your kids. It’s never too soon to do that, especially when you think how the cost of a post-secondary education tends to rise almost every year.
- Tackle some home improvement projects like repainting a room or replacing a leaky roof.
- Consider covering gaps in your insurance, such as adding a personal liability umbrella policy.
- Create a vacation or holiday gift account.
- From a short-term savings side, put some or all of the money into a certificate of deposit. This is a great investment vehicle for planned purchases down the road, such as a new car. Interest-bearing savings accounts are a good savings resource, too. BankFive has some great savings products you can take advantage of. Click here to check them out.
- Take an “all expenses paid” vacation – one that won’t put you into debt when you return home.
- Make a charitable contribution to a non-profit organization.
- Pursue continuing education courses as a way to invest in your professional future.
- Buy or increase your life insurance policy to provide more for your family.
Whatever you choose to do with your tax refund, try to get the biggest bang for your buck.