By now, most Idahoans eligible for a tax refund have already splurged. However, a thoughtful idea is to put your tax refund to good use by focusing on a need instead of a want. There’s more comfort in having strong and stable finances, living conditions, and personal growth than there is in spontaneous spending.
Here are some thoughtful ways to invest your tax refund:
- Repay student loans, credit card bills, third-party loans, mortgage payments, and past due rent/utility bills with a tax refund. Aim for bills with the highest interest rate first.
- Buy one of these insurance policies: home insurance, renter's insurance, flood insurance, and liability umbrella insurance.
- Invest in a career. A college course, online classes, skill building classes, or learning a new craft are great investments tax recipients can use far beyond tax season.
- Save for future emergencies. In case injuries, car trouble, home repairs, or job loss occurs, an emergency fund bank account will cover the unexpected. Three to six months of income is a good cushion.
- Spend it on a home repair. For instance, if you currently have a worrisome area of your roof that is sunken, bare of shingles, or has a hole - invest in hiring a professional to fix the problem rather than trying to patch it yourself. This will help maintain the structural integrity and could help prevent a more expensive future repair.
- Repair a vehicle. Purchase a new paint job, tires, brake pads, or repair nagging issues on the car, truck, van, bicycle, and motorcycle to make it more reliable and increase its longevity.
- Splurge on big-ticket, long-lasting items. A vacation, wedding, home, vehicle, appliance, and furniture purchases are great examples.
- Save for retirement. Open a separate, personal retirement account to invest in life after work. It's especially beneficial if the company retirement account is lost after termination or quitting. Adhere to the old adage to “Pay yourself first.”
- Donate to charity to help needy citizens. Research the charity thoroughly (and like the charity) before selecting one.
- Open a bank account to save for children's college tuition. The children may not understand now, but the future teenagers will be grateful.
The list above offers a fulfilling impact on the tax return as opposed to spending it on the latest trend. Selecting one of those choices gives tax returns a lifetime impact.