5 Smart Things to Do With Your Tax Refund

Financial tips

5 Smart Things to Do With Your Tax Refund

Posted by Infinite Wealth Advisors, LLC
7 months ago | March 7, 2022

It’s that time of year again! Most of us dread having to gather the necessary paperwork and file our income tax returns, but for some there is a nice surprise waiting at the end. It is possible you will receive a sizable tax refund.

It’s tempting to blow the whole check on something exciting, but that excitement wears off pretty fast. Why not put your tax return toward something that brings you greater financial freedom or peace of mind for a long time in the future?

Chip away at credit card debt. As you probably know, interest on credit card debt compounds over time, becoming a burden that can be difficult to shake off. But if you use your tax refund to make a dent in debt, you will pay off your cards much sooner. And you really can’t put a price tag on that kind of relief!

Purchase a new vehicle. If the price of gas concerns you, this could be the perfect time to trade up for a more economical vehicle. Your tax refund check might provide the perfect down payment.

Invest in economical repairs for your home. Speaking of rising prices, the cost of electricity has fluctuated too. Take this opportunity to weather-proof your home with new windows, weather stripping, or an updated HVAC unit. You’ll be glad for the lower energy bills when severe weather comes back around!

Stash it for a rainy day. You never know when an emergency might arise, and you don’t want to rely on credit cards to bail you out. If you’re not in debt, stash your tax refund check in a savings account to be used toward future emergencies. One day, you will be glad you did.

Prepare for your future. Do you meet your maximum contribution amount for your retirement fund each year? If not, consider directing your refund check toward your retirement savings. We know it’s not the most exciting thing to do, but the compounding interest over the years can add up to significant earnings. You’ll thank yourself later!

If you can’t decide how to spend or invest your windfall, give us a call. We can help you evaluate your financial situation, and dedicate your tax refund to a cause that best benefits you.

 

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