Five Smartest Things You Should Do With Your Tax Refund
Let’s talk about tax refunds. First of all, how do you get one? It’s simple. If you’ve overpaid your taxes throughout the year, you’ll get a refund from the government. You might also get a refund if there are any tax credits you qualify for. Tax credits are determined according to the amount of dependents you have and whether or not your income is below a certain threshold.
What are some smart things you can do with your tax refund? We have some tax refund spending ideas.
Some Smartest Things to do with Tax Refund
It’s always a good idea to have a little savings tucked away. Even a few hundred can make a difference. It’s always good to have something set aside if the kids get sick or the car starts making noises. Never be ashamed of how much you have in your savings. Everyone has to start somewhere. Saving your money is an excellent way to build an emergency fund or have money on hand if you are in the market to buy a car or a house.
Pay off Debt
Even if your return doesn’t match the amount of your debt, paying any amount is getting ahead. No matter what kind of debt it is, paying a little extra will help you in the long run, and you’re that much closer to having no more payments. Paying off debt is a great way to snowball your money, as what you no longer need to pay for one debt you can roll over into the next until all your debt is gone.
Have you considered investing? You don’t need a lot to invest. Even an extra five dollars can grow if invested wisely. Investment is playing the long game. You might not see returns right away, but investing is the perfect way to grow generational wealth for your family. Here at Financial Joy School, we teach you how to invest and make your money work for you. If you trust the process, you’ll be setting your family up for success in years to come.
Save for College
Open a 529 college savings account and set aside some money for your children’s college fund. You can open one no matter the age of your child. The great thing about a 529 account is that friends and family can add funds to it as well according to Fidelity.com. With this ability for loved ones to also add to your child’s 529 account, you’ll be able to use investing to your advantage by growing your child’s college money in the long run.
Build Up Your Business
Are you an entrepreneur or a small business owner? Use your return to invest in your company. Do you need a new business laptop? More supplies? A new marketing campaign? Maybe you want to go back to college to take a few classes on marketing or business? All these things are wise investments to build yourself up and secure stability for yourself, your business, and your family.
Here are some more great options for what you can do with your tax returns at these links:
To learn more about investing, closing the racial wealth gap, and growing generational wealth for Black and brown families, please visit Financial Joy School and become a part of our financial family.