11 Smart Things to Do With Your Tax Refund

Words by Abbie Dyer on Mar 2, 2015 10:41:00 AM

The dreaded Tax Day deadline will be here before you know it. Procrastination is alive and well on this day, where we scramble to the post office or send in our forms online. If you're lucky enough to get money back this year, what are you going to do with it?

While it’s tempting to buy a new TV or stock your shoe collection, consider putting your money to work this year. You never know what life is going to toss your way, so why not prepare for the future while you have the opportunity? Check out some of these smart things to do with your tax refund.

 

Pay Off Debt

If you have a credit card or auto loan with a high-interest rate, pay it off! If you don’t have enough to pay off the entire balance, consider paying what you can and consolidating the rest into one low-interest rate loan.

 

Invest in Yourself

Save your refund and earn a little more. A certificate of deposit (CD) gives you the flexibility to tuck away your money for a term that works for you. If you're planning to make a big purchase in a few years, this could be the perfect place to start saving.

 

Build Up Your Emergency Fund

You can never have too much saved away for a rainy day. Open a Money Market Plus account to earn a higher interest rate on your savings.

 

Start Your Down Payment

Are you growing out of your current place? An important part of buying a home is contributing a healthy down payment. You’ll lower your monthly payments and have instant equity in your house.

 

Plan for Retirement

Contribute to your retirement plan. This might not be the most exciting option, but your future self will be very grateful.

 

Purchase Insurance

When you first purchased home, auto or life insurance, maybe you opted for the cheapest plan just so you had some coverage. Use your extra cash to beef up your policies. You’ll protect your savings account if something goes wrong later.

 

Save for College

Put some money into your child’s savings account or contribute to their 529 Plan. Graduation day will be here before you know it and it'll be a lot easier if you're prepared. We cna help you put together a college savings plan if you need a little help.

 

Prep for the Holidays

The financial sting of the holiday season can stay with you long after you take down the Christmas lights. Open a holiday savings account and start stashing away some cash for next year.

 

Invest in Your Home

Replace your windows, repaint the walls or add some landscaping to increase the value to your place. You’ll add some curb appeal plus have a relaxing space to enjoy.

 

Give it Away

Share your good fortune with others. Donate to your favorite charity or invest in a local institution. You’ll feel good and you’ll make someone else feel good too.

 

Save for a New Car

Maybe a new car isn’t so far away. Put your money in a separate savings account so you’re not tempted to spend it. You’ll be driving off into the sunset before you know it.

We know it’s more fun to buy a new wardrobe or remote control airplane than it is to save. But if you put your money to work now we can (almost) guarantee that you’ll be happier in the long run.

 

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SEE ALSO: Retirement Planning: What is a Roth IRA?   |   4 Things to Ask Yourself Before Buying a Home

To read the full article, visit Kiplinger.com*.

*Third party website. Lake Trust Credit Union is not responsible for the content, availability, security or compliance of any linked third party websites. In addition, the site's privacy policies may differ from those of Lake Trust.


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