Today's guest article, 5 Ways to Maximize Your Tax Refund, is written by the owner of the financial help website "Ted Knows Money". Ted James specializes in private, one-on-one coaching and counselling sessions to help people take control of their finances.
Learn more About Ted James.
If you’re getting a tax refund this year, have you thought about ways to fructify this windfall? As tempting as it may be to treat yourself and go on a shopping spree, using your tax refund wisely could set you up for future financial success and increase your peace of mind. So read on to discover five ways to make your tax refund money work for you:
Invest in Your Home
Making home improvements can lead to lower energy bills and will add value to your property. For example, repairing or replacing an older roof can prevent leaks (both from air and water) and add to the curb appeal of your house, saving you money and increasing your property value. Make sure you work with a certified and insured roof replacement company that is familiar with building codes and permits in your area to protect your investment: it’s much harder selling a home when you don’t have the proper permits for the renovations you’ve done.
Put it Into Savings
Put your tax refund into a savings account and watch it grow over time. If you plan on making a large purchase in the future, like a new vehicle, large furniture or appliances, or on taking a family vacation, you can save money toward that goal instead of relying on credit cards to finance it. Additionally, creating a rainy day fund by keeping money stashed away in a savings account to use in case of an emergency – job loss, accident, illness – will help you feel more secure, prepared, and less stressed about the future.
Pay Off Your Debt
Use your tax refund to pay off your credit card debt, pay off your car, or make an extra payment on your mortgage to reduce the principal you owe. Getting out of debt is the best way to become financially secure and in charge of your own money. Instead of lenders making decisions for you in terms of payments, you’ll finally be in control of your spending. Not having to worry about paying your bills and creditors each month will also reduce your stress and allow you to enjoy life more.
Start Your Own Business
If you’ve always wanted to be your own boss, or if you just want to turn your hobby into a side hustle, your tax refund could be the seed money you need to launch your home-based business. Buy the office equipment, manufacturing machines, and raw materials you need, invest in online and offline ads, and set yourself up for success as a small entrepreneur. Owning your own business can lead to more financial and personal freedom than working for someone else, so if it’s been a dream of yours, why not invest in it?
Invest in Education
Use your tax refund to start a college fund for your kids. Open an Education Savings Account or a 529 Plan: both offer tax-free growth and will help your children graduate college with little to no debt. Or maybe you can use your tax refund to invest in your own career and future. The money could help cover the cost of tuition for the classes you need to get an advanced degree in your field. In turn, that degree could lead to a better position and a higher salary within your company. And you may be able to use the cost of your education as a tax deduction for the following year, so it’s a win-win!
A tax refund isn’t free money, it’s money you lent for free to the IRS for a year. So make that refund work for you and your family. Set aside and invest that money wisely, and you’ll soon be on the road to financial freedom.
For financial and money management tips and advice from a Christian perspective, view more at moneysolutionsonline.net.
Image via Pixabay
