So you have filed your 2017 taxes and now the name of the game is wait for that chunk of change to hit your bank account. The average tax return was $3,120 in 2015, which is a lot to play around with. So before you splurge on your next trip to the mall, take a look at this list of smart ways you can use your tax refund:
1. Pay down your debt.
This just might be everyone’s least favored use of a tax refund, but it is smart! Putting your tax refund toward your debts can help you save more by accumulating less interest on the lower outstanding amounts. You might have monthly payments on student loans, a car loan, credit card debt, or a mortgage, whatever debt you have it will certainly feel good to put a dent in the amount you owe. This was how I used 100% of my tax refund which helped me pay off the rest of my student loans.
2. Invest it.
Make your tax refund work for you! Try looking into opening a brokerage account or online trading account and learn about how to invest. Investing your tax refund wiselyÂ can prove to be very beneficial in the long run and can help you reach other financial and personal goals you have.
3. Emergency fund.
Life is unpredictable and priorities, both short-term and long-term, change constantly. Establishing an emergency fund and padding it up with extra cash will help prepare you what life might throw at you. You never know what is going to happen, and it is better to be safe than sorry.
4. Save for retirement.
Consider depositing your tax refund into your retirement account if you are behind on your retirement contributino for the year. Your refund can go a long way accruing interest in your retirement account.
5. Invest in yourself.
Do something to better yourself whether that be putting your refund toward higher education, developing professional skills, or even helping you achieve a personal goal such as getting a personal trainer. These can lead to other job opportuities, a promotion, or simply a healthier and happier life.