For some people March and April can be a painful time financially. If you have to pay additional money in taxes it isn’t much fun. On the other hand, for those of you who get a refund due to over payment or simply not making enough income you will end up getting a refund.
Today I want to give you a list of a few things you might consider doing with your refund instead of wasting it on meaningless spending.
- Start or finish your emergency fund. Depending on the size of your refund you might be able to add to an emergency fund or at least get one started.
- Age your money a little. We talked about how I love YNAB a tax refund would be a great way to get a couple weeks or even a month ahead on expenses.
- Invest it in an IRA. If you don’t have a significant tax liability I would recommend a Roth IRA. The money grows tax free and you can always withdraw what you contribute tax free.
- Pay off some debt. If you still have debt hanging around, a tax refund is a great way to clear some up some of that debt and save some interest.
- Learn something new. Have you wanted to learn more about a topic like personal finance, cooking, minimalism, or any host of other topics? Use your refund to pick up a few resources or take a class on that topic and get learning.
If you get a refund make sure that you have a plan and execute the plan. If you let it sit there and don’t have a plan, it will end up slipping away.
We got a refund and chose to do a little of everything. We bumped up our emergency fund, put some into aging our money and we are going to have a nice dining room table built by a friend. (Ours is a little small for our family size).