The average tax refund in 2011 was over $2,900 (source: CNNMoney). Receiving such a large sum may feel like a gift, but there's nothing "free" about your refund - it's yours from working hard all year. Being sensible is boring, Tightwad knows - but so important. Don't waste this opportunity, consider these tips for being smart with your refund:
Adjust your withholdings If you consistently receive a large refund it's a sign that you're withholding too much from your paycheque, which could be saved, invested or used to pay down debt throughout the year.
Pay down debt This is the best thing to do with your refund. Paying down existing debt will lead to guilt-free fun in the future. In addition to improving your credit score, you'll have more money each month once minimum payments are behind you instead of throwing money on interest rates.
Invest in your home Now is the time to tackle home improvement projects which is a wise investment because they will ultimately lead to an increase in the value of your home. Extend the value of your refund by purchasing discount gift cards to home improvement store where you can save an average of 15% instantly (Tightwad LOVES discount gift card sites)
Donate to charity What goes around comes around. Donating to an eligible charity provides you with a tax write-off that can be deducted in next year's taxes.
Start (or add to) a retirement fund
Improve yourself Continuing education is the key to better job prospects. Look for courses at your community college or find out when and where the next regional conference in your industry is happening.
Work on your emergency fund Life's curve balls are inevitable and having the peace of mind to pay for unexpected expenses during a stressful situation is important.
Stretch your spending Now's the time to start new habits when it comes to necessary spending. Purchase discount gift cards to reduce daily costs and embrace couponing for more savings.
Adjust your withholdings If you consistently receive a large refund it's a sign that you're withholding too much from your paycheque, which could be saved, invested or used to pay down debt throughout the year.
Pay down debt This is the best thing to do with your refund. Paying down existing debt will lead to guilt-free fun in the future. In addition to improving your credit score, you'll have more money each month once minimum payments are behind you instead of throwing money on interest rates.
Invest in your home Now is the time to tackle home improvement projects which is a wise investment because they will ultimately lead to an increase in the value of your home. Extend the value of your refund by purchasing discount gift cards to home improvement store where you can save an average of 15% instantly (Tightwad LOVES discount gift card sites)
Donate to charity What goes around comes around. Donating to an eligible charity provides you with a tax write-off that can be deducted in next year's taxes.
Start (or add to) a retirement fund
Improve yourself Continuing education is the key to better job prospects. Look for courses at your community college or find out when and where the next regional conference in your industry is happening.
Work on your emergency fund Life's curve balls are inevitable and having the peace of mind to pay for unexpected expenses during a stressful situation is important.
Stretch your spending Now's the time to start new habits when it comes to necessary spending. Purchase discount gift cards to reduce daily costs and embrace couponing for more savings.
1 comments:
Paying off debt is what I'm doing!
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