Every year at tax season, you may say that you’re going to use your refund appropriately, and then before you know it, the refund has shrunk, and you can’t meet any of the goals you were thinking about meeting. You can best spend this money in several ways to benefit you and keep you in a better financial situation throughout the year. Keep reading to see how to spend your refund best this tax year.
Take Care of Home Repairs
Over the last year, you’ve probably noticed a few repairs you need to make around your home. Make a list of things you want to do and a list of things that need to be done to prevent further damage to your home. If you’re getting back a generous refund, now is the time to take advantage of the larger projects you otherwise wouldn’t have the money for, like roof repair. According to Home Advisor, the common roofing repair job costs around $1050, most falling between the price range of $380 and $1746.
Have Your Car Serviced
If it’s time to have that standard oil change, tire rotation, or even a new set of tires for your vehicle, this refund is the best time to take advantage. Remember that this money isn’t a part of your standard budget, so the extras should be done with this money while it’s available. Some larger services, like transmission services, are more appropriate for the tax refund. According to the Transmission Repair Cost Guide, a transmission has oil and a filter that should be changed every 20,000-30,000 miles or every 18 months.
Pay Off Some Debt
Regarding debt that needs to be paid, this could fall into several categories. First, protect your credit score by paying off any outstanding debts that have gone into collection or are in danger of being repossessed. These are usually medical bills and payments that were missed and, after so many days, are sent to the collection agency. Once they post on your credit report, they can impact your score. They could also impact your ability to get service at that facility.
The next type of debt to look out for is an outstanding credit card balance. You want to get your debt down to 30 percent or lower, so you must pay these cards down to that point when you get your tax refund. This is also true for personal loans. Both credit cards and personal loans accrue interest, and the longer it takes to pay them, the more money you’ll spend on this debt.
Add To Your Savings
If you aren’t sure what to do with the rest of the refund or have no large projects to spend it on, add that money to your savings account. Something will come up unexpectedly over the next year, and this money can be used to cover those costs, so you don’t have to take it out of your monthly budget. If you don’t already have a savings account, this is a good time to go to your bank and establish one today.
Treat Yourself
While there is so much good you can do with that refund money, make sure you do something for yourself. You can treat yourself to a spa service, a new piercing, or maybe even a new tattoo you will have with you forever. According to Gitnux, a smaller tattoo generally costs about $50, so you shouldn’t feel guilty spending a little more on something you want.
Make This Year Better
Give yourself a plan for your tax refund this year, and know how you want to spend so that you aren’t overspending in places that won’t help you later. You can do some fun things, but you should also be financially responsible so you aren’t in a financial bind later when you need the money or can’t put off a home repair you need. Consider these options for your tax refund and see how well they set you up for the next year.
Leave a Reply