Congratulations! You’ve completed your taxes, and your refund is on its way! This is about the point where the wheels start turning and you begin dreaming of all the things you could do with this extra money.
Spending your whole tax refund right away might feel right at the moment, but it could also fill you with regret down the road. Instead of spending it all in one place, check out these tips to help you get the most out of this year’s tax refund!
Create an emergency fund
Sure, starting an emergency fund is not as much fun as spending your refund on an impromptu weekend trip with friends, but when the unexpected happens, you’ll be glad you were prepared.
As much as we don’t like to think about it, emergencies do happen. Your car could be running great one day and the next day it has you stuck searching for a ride to work. A good rule of thumb is to eventually have three to six months cash in savings for those “just in case” moments.
Turning your tax refund into your emergency fund could tremendously lessen your stress if, and when, the unexpected happens.
Watch it grow!
A great way to jump-start your savings is to put your tax refund into a CD savings account. This is the most popular and easiest way to put away your money and earn more interest. The certificate of deposit will hold onto your money for a certain number of months and earn interest, while ultimately taking away the temptation of spending.
Just imagine what you could do with the money you’ll save!
Have you ever thought about donating to a cause you believe in? Now’s your chance to put that tax refund into something meaningful this year! There are millions of causes out there that could use your help.
At the end of the day, donating to a good cause will never leave you feeling guilty.
Don’t forget to have a little fun!
We all need to be responsible and save money, but we also need to remember to have a little fun and make ourselves happy. Before you put your full refund away for a rainy day, set aside little extra to use on something that genuinely makes you happy!