5 Creative Ways to Use Your Tax Refund
Receiving a tax refund is a good news/bad news scenario. The good news, obviously, is that you have a decent chunk of ready cash at your disposal. The bad news is that it means you’ve been having too much tax withheld throughout the year, and should probably consider adjusting your withholding. But if you are getting a refund, what should you do with it? Practical wisdom says you should use it to pay down credit card debt, start or add to your emergency fund, or add to your retirement savings, all of which we endorse. But if you have those areas of your financial life under control, there are some other ways to use your tax refund you might not have considered. Let’s take a look at them:
Go Back to School — Have you been wanting to pursue or complete a degree? Or maybe you’re in a profession where continuing your education and receiving special certifications can increase your earning power. If that’s you, use your tax refund to pay for at least some of the classes you need. It’s an investment in yourself and your future that can ultimately pay off down the line in the form of higher earnings.
Start a Small Business — Do you have a great idea for a side business but not the money you need to get it started? Your tax refund might just be the capital you need. Use your tax refund to stock up on supplies and create marketing materials such as business cards and brochures. Then start getting the word out and earning some extra money.
Do Home Projects — We all have little things we’d love to do to enhance our living space – if only we could afford them. You probably can take care of them with your tax refund. To get the most bang for your tax return bucks, focus on completing projects that add to your home’s resale value, such as re-grouting or replacing bathroom tile, replacing worn carpeting, and upgrading kitchen and or/bathroom fixtures.
Set Up a College Fund — If you have children and you haven’t started saving for their college education, starting a college fund would be an excellent thing to do with your tax refund. Talk with a financial planner about establishing an appropriate college fund to meet your goals. The less reliant your child is on student loans, the better off they will be.
Take a Road Trip — If your refund is just a few hundred dollars, hop in the car and take a weekend road trip. There are probably plenty of places within a few hours of your home you’ve been meaning to check out, and your tax refund gives you the perfect opportunity to do that without compromising your budget or paying for it with a credit card.