Refund Mania! Here are six smarter ways to spend your tax refund
The April 17th tax deadline has come and gone, which leads us to the much happier half of the season – TAX REFUNDS! If you were an early-bird filer, you probably already have your tax refund in hand, while the procrastinators will have to wait a little while longer. Either way, you’ll need to come up with a solid plan for that chunk of change.
The average 2017 tax refund in Georgia is expected to be $2,793, slightly lower than the national average of $2,895. Regardless, that’s a hefty sum, especially when you receive it in one big fat check. You may think of it as new-found money, but you need to remember that you worked hard in 2017 and your refund is not just some random windfall. Will you spend it, save it, or invest it?
What’s the plan?
Consider your current financial situation and your priorities. What decisions can you make now that might positively impact your financial future? Here are six smart moves to think about.
1. Transfer it. One of the best recommendations we can offer is to immediately move your refund from your checking account to your savings account. This seemingly insignificant move could be the smartest step in the entire process. Why? Because it’s easy to spend $20 here and $50 there, and when it’s all whittled away, you’ll have nothing of real value to show for it. What to do next is up to you.
2. Catch up on your savings. B-O-R-I-N-G, we know, but excitement isn’t always the goal. Do you have an emergency fund that needs a little boost? Have you fallen a little behind on your child’s college fund? Need to replenish your personal savings? Paying bills and saving for the future is essentially a requirement when you’re adulting. Plus, having some cash stashed away for an unexpected expense would give you some financial peace of mind, and that’s incredibly valuable in today’s economy.
3. Invest in your future. With the help of a financial advisor, find an investment that will help you earn more money in the long-term. Consider an IRA, a 529 plan, or even a traditional brokerage account. Whichever option you choose, be sure to discuss your risk tolerance, time horizon, and ultimate goals before making a decision.
4. Pay off your high-interest debt. Revolving debt is one of the heaviest financial burdens you can carry. As interest compounds monthly and you rack up new charges, your existing balance climbs fast. Now is the time to knock down some debt and regain control over your finances.
5. Spend it on your home. After all, it is one of the biggest investments you’ll make in your lifetime. Shouldn’t you take care of it? Consider some maintenance or improvements that will increase your home’s value, or double up on your mortgage payments so you can pay it off sooner and reduce your accumulating interest.
6. Have a little fun. You need to make a smart decision and use your refund wisely, but that doesn’t mean you can’t enjoy yourself, too. Go out to dinner, take in a Braves game, opt for some wireless earbuds or a trendy new pair of kicks. Just make sure it’s not too extra.