Are you getting a refund this year? What do you plan on doing with the money? Do you have debt to take care of? Are you looking into a home project such as building an addition or a new porch? A little cash on hand can provide financial and mental ease.
If you are unsure of how to use your money, here are a few things to consider:
Pay off debt or student loans
Whether you have a small amount of credit card debt or have a large student loan bill per month, putting money towards it will help you down the line, even if it doesn’t feel like a major contribution. If you get a sizable refund back, you could put it towards your interest from your student loans. Every cent matters!
Enhance your home with a new project
When you update your home with new additions or appliances, it increases the value of your home and property. Furthermore, improving your home is likely going to reduce costs as well. For instance, if you get new windows, you could save money on your heating bill. If there is less energy leaving your home, less money is going out the window.
Simply save it or invest it
Saving your money, whether that be for a nest egg or an emergency fund, is always a smart idea. In life, we never plan for accidents or emergencies to rise, which is why it is vital to have money saved to help you when you are in need. You also could invest your money in an individual retirement account (IRA), and watch your savings grow!
Prepay your mortgage
Although your tax return money is likely to be a small chunk of change to go towards your mortgage, it will help you down the line. Think of it this way: you are one payment closer to paying it off!
Whether you choose to save your refund, or build that new front porch, make sure you think about your financial situation, your needs, and your goals first, and then decide what is best for you and your future.
May 17th, 2021 is the due date for taxes, so make sure to file them within the two months. If you are unsure of how to file your personal or business taxes, do your research on local accountants to help you with the process.