MAIN_What to do with your tax refund

Once people receive their tax refund, they immediately send their accountant their documents.

The quicker they start this process, the faster their tax refund money will come.

That’s right – once people have filled out their tax forms, the Internal Revenue Service (IRS) gives back people their taxed money, which really should have been in their pocket all along.

Before you start making plans with this “bonus money”, make sure it is spent with a purpose, instead of carelessly blowing it all off.

Sure, it is exciting to receive some extra money, however, it shouldn’t be treated any differently from your standard paycheck.

Don’t get caught up in the hype of getting quick cash and spend it all at once. Instead, carefully review your personal situation. There could be other areas in your life that could use some financial assistance.

Which is why you should consider these top 9 things you should do with your tax refund.

1. Start an emergency fund


Emergency funds act like a financial safety net.

If you were to encounter a financial hardship like losing a job or needing to pay expensive medical bills out of the blue, your emergency fund can help you through these tough times.

Many experts advise people to have at least six to eight months’ worth of savings stored up for financial emergencies. Typically, these funds are stored in accessible interest-bearing accounts, such as an online savings account.

Although it will take some time to build up this fund, saving and putting aside even the smallest amount can benefit you in the long run.

You never know when you will need extra cash to pay for your mortgage payments or credit card bills. It would be tragic if you were left to make payments on time with limited cash available.

2. Eliminate high-interest debt


Your tax refund can also help you pay off any high-interest debt you may have. Eliminating debt that issues a high interest rate can significantly reduce the amount you owe.

If you have a wide variety of debt, you can choose a debt to pay off that carries the highest interest rate.

Usually, people are torn between title loans, student loans, car loans or credit card debt. Either way, paying off high-interest debt can drastically help decrease the amount of debt you owe.

3. Refinance your mortgage


Refinancing your mortgage is a great option for homeowners who are looking to save some money on monthly mortgage payments or shorten their loan’s term.

People often refinance their mortgage because their monthly mortgage payments are too high or want to cut back and save money, so they can manage their finances more comfortably.

Depending on your loan’s terms and your personal situation, refinancing may be a more beneficial and effective strategy for you.

However, when you refinance your mortgage, you will have to pay for closing costs and other fees. This is where your tax refund comes in handy.

Use this extra money to pay for those costs and you can save thousands of dollars on your mortgage interest.

However, when you refinance your mortgage, you will have to pay for closing costs and other fees. This is where you tax refund comes in handy.

Use this extra money to pay for those costs and you can save thousands of dollars on your mortgage interest.

Disclaimer: Depending on your loan’s terms and your personal situation, refinancing may be a more beneficial and effective strategy for you. Closing costs can also be added on to a loan or waived, depending on your situation.

4. Make home improvements


If you already have an emergency fund started, have an adequate amount of savings and no serious amount of debt, why not make some improvements on your home?

Making small or big improvements on your home can increase your home’s overall value. Depending on how big your tax refund is can determine what kind of projects you can take on.

For example, you can update the kitchen. Nine out of 10 home improvement experts will agree that updating your kitchen will boost your home’s value up the most. Because it is the most common room of the house, the way it looks, and functions is a top priority for homeowners across the board.

Which is why updating it can benefit you in the long run. Depending on your budget, you can update the kitchen cabinets, redo the countertops or give the walls a nice, fresh coat of paint. Whichever route you take, making these updates can significantly improve your home’s value.

The bathroom is another great option to invest your tax refund into. Modern and up to date bathrooms can drastically increase your home’s value and give you more satisfaction. Just like the kitchen, the bathroom is another vital room that needs to be well maintained.

Home improvement experts say even replacing the faucet, toilet or sink counter can do just the trick. If your bathroom still has wallpaper, consider painting or adding a new wallpaper, because odds are, the one on your wall is outdated or faded.

If the inside of your home doesn’t really need any extra help, take a look outside. How is your curb appeal? If you are looking to sell your home, experts say one of the easiest ways to attract potential buyers is to update the exterior of your home.

Simply by adding some color like planting flowers, updating the numbers of your address or redoing the driveway can appeal to a larger audience and add to your home’s overall value.

Even updating the windows can help improve your home’s value. Because it is an expensive investment, your tax refund should be able to help finance the project.

Home improvement experts say that new windows can make a comfortable return on your investment. Better yet, update your windows with energy-efficient glass so you can cut back on your energy bill.

5. Create a savings account


Creating a savings account can be extremely useful and teach you the discipline of saving and spending money wisely. Not only will it teach you the importance of money, it can prevent you from taking on debt in the future.

First, you will need to set a budget and divide your tax refund depending on how many purchases you plan on making in the future.

By directing and saving your money for specific purposes, can help limit how much you spend.

6. Pay down your mortgage principal


If you want to improve your home’s equity, consider using your tax refund to pay down your mortgage principal. This contribution can help improve your home’s equity, in addition to paying off your mortgage loan faster.

Depending on how much you put toward your mortgage principal will directly affect how much it will benefit you.

For instance, if you have a 30-year term, a $100,000 loan with a 4.20% interest rate and you put your tax refund of $1,500 toward your mortgage principal, you can save up to several months of payments and over thousands of dollars in interest.

This one-time contribution to your mortgage principal can drastically help shorten your loan’s term and ultimately reduce the amount you owe.

7. Fund your down payment


On the other hand, if you are a first-time homebuyer, using this money can help contribute to your down payment.

Many first-time homebuyers have expressed that financing the down payment is one of the hardest financial obstacles they face.

Some homebuyers look for specific mortgage loans that require less than the standard 20% market value of the home. Or they receive gift money from their parents or relatives, or apply for homebuyer programs that offer financial assistance.

With the down payment being a large chunk of change needed upfront, consider using your tax refund and putting it toward your down payment.

This option can help lower the amount that comes directly out of your pocket and finance the home of your dreams.

8. Invest in business


Do you have an idea in mind that you wish could turn into a business?

Your tax refund can help you get a jump start on bringing this idea to life. Of course, not only one tax refund can finance the whole idea, but using it and then some could turn into a real running business.

Investing in a business that you know that will be profitable and return more than you put into it can be a strategic way to increase your income.

Depending on how small your business is, you may be eligible for tax deductions.

Small business owners are faced to finance a lot of their own. Which is why expenses that are primarily used for the company to function could be tax-deductible.

These deductible expenses are classified as something that is ordinary and necessary to make the company run smoothly. For example, if you were running a hair salon, new equipment like a hair dryer or brushes could be tax-deductible.

9. Splurge on yourself


If you saved all year long, paid your bills on time and already have a savings account started, why not treat yourself?

It’s perfectly OK to splurge on yourself once in a while, and your tax refund could be the best opportunity to spend as you please.

Don’t get too carried away and allow yourself to spend an additional chunk of cash on a shopping spree or a trip to Paris.

Something that is more realistic and within your tax refund limit could be treating your family out to a nice dinner or finally going to that long overdue spa day.

However you may treat yourself, remind yourself to stay within your limits and don’t go overboard.

What to spend it on?

As you can see, there are many options on what you can do with your tax refund money.

If you are struggling on what you should do with this money, base it off your finances. Your overall financial situation can help determine what you should spend it on.

If you have outstanding debts, trying to start a business or planning to remodel the kitchen, your tax refund money can help fund your top priority.

You just need to mindfully analyze your situation and rank what needs to be taken care of first.

Thinking of Saving

money on your mortgage?

Refinace My Mortgage

mortgage loan process

41 responses to “Discover 9 Smart & Practical Things To Do With Your Tax Refund This Year”

  1. This is the best blog for anyone who wants to search out out about this topic. You notice so much its virtually laborious to argue with you (not that I truly would need匟aHa). You definitely put a new spin on a subject thats been written about for years. Nice stuff, simply nice!

  2. Spot on with this write-up, I truly think this web site wants much more consideration. I抣l most likely be again to read rather more, thanks for that info.

  3. Spot on with this write-up, I truly suppose this web site wants rather more consideration. I抣l most likely be once more to read rather more, thanks for that info.

  4. kyrie shoes says:

    Whats up! I just want to give an enormous thumbs up for the great data you could have right here on this post. I shall be coming again to your weblog for extra soon.

  5. goyard says:

    Oh my goodness! an incredible article dude. Thank you Nevertheless I am experiencing situation with ur rss . Don抰 know why Unable to subscribe to it. Is there anyone getting identical rss problem? Anybody who knows kindly respond. Thnkx

  6. I am often to blogging and i really admire your content. The article has actually peaks my interest. I am going to bookmark your website and hold checking for brand spanking new information.

  7. Oh my goodness! an incredible article dude. Thank you Nonetheless I’m experiencing subject with ur rss . Don抰 know why Unable to subscribe to it. Is there anyone getting similar rss downside? Anyone who is aware of kindly respond. Thnkx

  8. I’m commenting to make you understand of the awesome discovery our daughter had viewing the blog. She discovered a good number of pieces, including how it is like to have a very effective teaching mood to get most people smoothly master certain complicated topics. You really surpassed visitors’ expected results. Many thanks for producing those warm and helpful, safe, revealing and even fun thoughts on your topic to Kate.

  9. I simply needed to appreciate you yet again. I’m not certain what I could possibly have accomplished in the absence of those information documented by you relating to such subject. It was before a very difficult dilemma in my circumstances, nevertheless taking note of this skilled tactic you treated the issue took me to weep over delight. I’m happier for this help and have high hopes you really know what an amazing job you have been getting into instructing people today via your web site. I’m certain you’ve never met all of us.

  10. I wish to voice my passion for your kind-heartedness giving support to those individuals that should have assistance with this field. Your personal dedication to passing the message all around turned out to be especially helpful and have really permitted many people much like me to get to their ambitions. Your new useful publication implies so much a person like me and especially to my office colleagues. Thanks a ton; from each one of us.

  11. yeezy supply says:

    I together with my guys were found to be digesting the great tips and tricks from your site then quickly came up with a horrible feeling I had not expressed respect to the site owner for them. All of the boys had been as a consequence warmed to read them and have definitely been loving these things. Appreciation for really being very considerate and for obtaining certain excellent things millions of individuals are really desirous to be informed on. Our own sincere apologies for not saying thanks to earlier.

  12. I not to mention my friends were looking through the great items found on your web site and so then got a terrible suspicion I had not thanked the site owner for those strategies. All the people became so excited to see all of them and already have in reality been taking advantage of those things. We appreciate you getting so considerate and for figuring out certain brilliant information millions of individuals are really desperate to discover. Our sincere apologies for not saying thanks to sooner.

  13. hermes says:

    My husband and i felt absolutely joyful when Emmanuel could deal with his survey because of the ideas he got from your very own web pages. It is now and again perplexing to simply possibly be making a gift of guidance which often most people might have been trying to sell. We really fully understand we have you to thank because of that. The explanations you have made, the straightforward site menu, the relationships you will assist to engender – it’s many exceptional, and it’s letting our son and the family consider that this concept is awesome, and that is exceedingly fundamental. Many thanks for the whole lot!

  14. hermes belt says:

    Needed to put you one tiny note just to say thanks a lot as before for your breathtaking techniques you have discussed on this page. It has been certainly tremendously open-handed with people like you to present easily just what many individuals would’ve made available as an e-book to earn some profit for their own end, specifically considering that you might have tried it if you ever considered necessary. These things as well served as a fantastic way to realize that many people have similar desire much like my personal own to see good deal more in regard to this condition. I believe there are a lot more fun sessions ahead for many who look into your site.

  15. I am writing to make you know what a beneficial experience our daughter obtained using your webblog. She learned so many issues, which included what it is like to possess an incredible giving style to make certain people quite simply learn about certain complex subject areas. You actually did more than our expectations. Thank you for offering those precious, safe, edifying and unique thoughts on this topic to Lizeth.

  16. My husband and i felt quite more than happy John managed to conclude his research through the precious recommendations he gained from your blog. It is now and again perplexing to simply choose to be giving for free things others could have been making money from. And we also already know we have the website owner to be grateful to because of that. The type of illustrations you’ve made, the easy web site navigation, the relationships your site aid to promote – it’s everything overwhelming, and it’s making our son in addition to our family reckon that that situation is cool, and that’s extraordinarily serious. Thanks for the whole thing!

  17. yeezys says:

    I definitely wanted to compose a brief message so as to say thanks to you for these magnificent pointers you are sharing on this site. My rather long internet research has now been recognized with excellent concept to write about with my friends and classmates. I would believe that most of us site visitors are very much blessed to dwell in a fantastic website with very many lovely individuals with good tips. I feel quite lucky to have seen your webpages and look forward to tons of more fun times reading here. Thanks a lot once again for everything.

  18. I simply wanted to appreciate you once again. I do not know the things that I might have made to happen without the entire strategies contributed by you regarding such a area. It previously was a traumatic setting in my view, nevertheless viewing the specialized manner you resolved the issue made me to cry for gladness. I will be grateful for the help and even wish you really know what a great job you’re doing instructing most people via your webpage. I am certain you’ve never come across any of us.

  19. yeezy shoes says:

    I’m writing to let you understand what a cool encounter my cousin’s girl encountered browsing yuor web blog. She picked up too many things, most notably how it is like to possess an awesome giving style to have other folks without hassle have an understanding of selected advanced subject matter. You really did more than her expected results. Thank you for supplying those informative, healthy, explanatory and cool guidance on the topic to Gloria.

  20. A lot of thanks for all of the hard work on this web site. My mom loves setting aside time for investigation and it is obvious why. Most people notice all concerning the lively means you provide precious suggestions through your web site and as well recommend contribution from other people on the subject so our girl is without question learning a whole lot. Take pleasure in the rest of the new year. You’re the one doing a good job.

  21. lebron 17 says:

    I definitely wanted to type a simple message in order to thank you for all the marvelous suggestions you are sharing on this website. My rather long internet search has now been honored with beneficial facts and techniques to write about with my visitors. I would assume that we website visitors are quite blessed to dwell in a fantastic site with so many outstanding professionals with good techniques. I feel rather privileged to have discovered the web site and look forward to some more awesome moments reading here. Thanks again for a lot of things.

  22. I simply wanted to write a remark in order to say thanks to you for the marvelous ways you are showing on this website. My time consuming internet investigation has at the end of the day been honored with beneficial facts and strategies to talk about with my close friends. I ‘d claim that many of us visitors are truly lucky to dwell in a really good community with many marvellous professionals with valuable tricks. I feel extremely grateful to have encountered your entire website and look forward to some more fun minutes reading here. Thank you once again for all the details.

  23. supreme says:

    I’m writing to let you know what a terrific experience my wife’s child obtained viewing your web page. She discovered such a lot of details, which include what it’s like to have a great helping nature to make many more very easily gain knowledge of specified tricky topics. You undoubtedly did more than our expectations. I appreciate you for presenting such warm and friendly, trusted, educational and in addition cool tips on your topic to Emily.

  24. I want to express my respect for your kind-heartedness supporting individuals that really want help with in this issue. Your very own commitment to passing the message across has been exceedingly important and have always made many people just like me to reach their desired goals. Your new warm and friendly advice signifies a lot a person like me and far more to my mates. Best wishes; from each one of us.

  25. I am glad for commenting to make you be aware of what a exceptional encounter our princess encountered viewing your site. She discovered a lot of issues, including what it’s like to possess an ideal teaching mindset to let the mediocre ones just learn selected grueling issues. You truly did more than readers’ expected results. Many thanks for churning out those interesting, safe, informative and as well as cool tips on the topic to Tanya.

Leave a Reply

Your email address will not be published. Required fields are marked *

Pin It on Pinterest