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Contributed by Kyler Redder and Kelly Bowen
9 Smart Things to Do With Your Tax Refund
With tax day just past, many of us have been the recipients of a tax refund. Since refunds are fairly unpredictable, most people don’t have a plan in place just yet.
Here are 9 ideas to get the most out of your refund:
1. Start or Increase Your Emergency Fund.
If you don’t have an emergency fund, consider opening a high-yield savings account and depositing your windfall for a rainy day. While it might not be enough to create a full-fledged emergency fund, it’ll be a good start. And if you already have an emergency fund, consider adding to it.
2. Pay Down Debt.
Whether it’s credit cards, an auto loan, or a student loan, you need to get that monkey of your back. So add your windfall to your debt snowball and keep on digging.
3. Invest in Yourself.
Use the money to cover tuition for a course about something that interests you, or which increases your earning potential.
4. Start or Add to Your “Sunny Day” Fund.
While emergency funds are all well and good, everyone needs a bit of fun and
games every now and then. Why not set some aside for a future vacation or
some other special expenditure?
5. Invest in Your Children’s Future.
Start a college savings plan for each of your children or a children’s “pot” that is set aside for future college education expenses.
6. Refinance.
Here’s another opportunity to turn a few thousand dollars into years of annual savings. While interest rates had run up a bit over the past few months, they dipped again recently following the Earthquake in Japan when investors fled into Treasuries. The dip in the 10 Year bond yield drove mortgage rates back down so refinancing may be more attractive than it was just a few weeks ago. Often times, a refinance will run a few thousand dollars in closing fees, but if the monthly savings make sense, go for it!
7. Get that Business Up and Running!
Have you been looking for seed money to take your business to the next level? Do you have a venture that you want to start? You can use your refund to get you moving in the right direction. It’s a great opportunity to turn your refund into income for years to come, and get a few more small business tax
deductions next year too.
8. Do a Home Improvement Project.
Roll that money right into new kitchen cabinets, a freshened-up bathroom, repainting some rooms, or a new carpet. Home improvement projects can increase the value of your home, which is especially important if you foresee a move in the coming years.
9. Splurge on Something Fun.
That’s right, spend some money on something fun for yourself. Retailers everywhere are slashing prices, so you might be able to get that designer bag, iPad 2 or that once-in-a-lifetime vacation. Don’t feel guilty about it. Just don’t let your eyes get too big for your stomach.
Established in 2000, Bowen Insurance Group specializes in “Safe Money” financial planning, health
insurance and employee benefits. For questions, please call us at (208) 878-8118.
