Wise Ways to Spend Your Tax Refund
Some Wise Ways to Spend Your Tax Refund
Now that tax season is over and you have your tax refund check, how are you going to use it?
Although there may be a number of things you have been wanting to purchase, it might be a
good idea to invest at least a portion of your tax refund in something that will increase your long
term financial well-being. Outlined below are several wise suggestions that will do just that!
Home Improvements: Your home is probably your most valuable asset. This being the case, it
might be a good idea to spend some of your tax refund check on updating or making
improvements to your home. Do you have an outdated kitchen or bathrooms? Do you think you
may need a new roof? What about your appliances? Are they running properly? It is probably a
good idea to walk around your home and make a list of all of the items that need repair or
maintenance. Once the list is compiled, hire a reputable home repair professional to help you
achieve your desired goals. The investment and return in real estate is unparalleled so the
upkeep of your primary residence is always a good idea.
Refinance Your Mortgage: With interest rates still at an all-time low, you may be able to lower
your interest rate by refinancing your mortgage. A lower interest rate can significantly lower
your monthly mortgage payments, saving you hundreds or even thousands of dollars over the
course of a year. This savings, in turn, frees up extra cash in your personal budget that can be
used to meet long- or short-term savings goals or put to other good use. However, refinancing
a mortgage usually comes with front end costs and this is where a tax refund check can come in
handy. Your tax refund can be used to pay the fees and closing costs associated with a mortgage
Set up an Emergency Savings Fund: It is always smart to be prepared for future financial
surprises. Sometimes a large unexpected expense can push a financially sound person into a
monetary catastrophe. This being the case, a nice sized savings account or emergency fund can
provide peace of mind in knowing that your will be prepared for whatever unknown expenses
are on the horizon. Most financial professionals recommend setting aside the equivalent of six
to nine months of your ordinary expenses in an interest bearing, easily accessible bank account.
Placing your tax refund check somewhere where it can used to cover an unknown future
expense may not completely meet the emergency savings goals recommended by the
professionals, but it is certainly a step in the right direction!
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