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People are anxious about their tax refunds. When am I getting it? How can I get it faster? Which places give the money right away and how much does that cost? These are the questions I hear inside of huddles, on social platforms, and online.
As refunds begin to roll in bank accounts, I wanted to share ways you can use the funds wisely. The key message is not to spend it on something that will mean anything to you in a month or two months. Also, please don't spend the money before you even have it!
Here are 5 ways to consider for your tax refund:
1. Paying Off Debt
Use your tax refund to pay off some of your credit card debt. This is a great way to reach your overall financial goals quicker. When the credit card debt is gone it relieves some of your fluid money each month so you have more money to save for your goals!
There are several tools that can help you such as a free debt tracker on my free resource page or this mini financial planner.
An emergency fund is a great financial goal to have if you haven’t had a chance to create one yet. Life can happen at any time. "Life happening" means you can get a flat tire or a busted water heater or things like that for which you may not plan for but must take care of them when it happen.
If you have an emergency fund, consider topping it off a bit. It can definitely never hurt to have even more money set aside because you never know what could happen! Having an emergency fund can help reduce the stress knowing you have the funds to take care of it. High interest savings accounts are the best place for this fund. Check out a few in this recent article on Nerd Wallet for more info on great savings accounts.
Robinhood is a fun and easy way to get started with investing in stocks. Read more about it before you get started as there are so many aspects to investing. You will want to decide exactly how you want to invest your money. If you use my link both YOU and I can get a free stock as well! Get started with Robinhood here.
4. Start A Business
There are so many businesses you can get started without a lot of money. Remember the key words are "get started.” You will need to work hard at these businesses and continue to invest in them so that they grow and make even more money.
5. Open a Roth IRA
It’s a smart idea to use your tax refund to open a Roth IRA. What is a Roth IRA? According to Investopedia A Roth IRA is a tax-advantaged retirement savings account that allows you to withdraw your savings tax-free. Established in 1997, it was named after William Roth, a former Delaware Senator. Roth IRAs are similar to traditional IRSs with biggest distinction between the two being how they’re taxed.
So if your refund money is about to roll in, or have come in and it is not all gone, consider 1 of the 5 suggestions above. I would love to hear of other suggestions on how you have used the refund or how you have used it or will use it in comments. The goal to make good use it.
If you want to know when to expect your refund, the IRS has site called "where is my refund". Find out where your refund is!
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