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It’s tax time! What begins with collective grumbles and furious searches for missing receipts (hopefully) ends with a sigh of relief and a full bank account. But, what happens to those refunds once they hit the direct deposit? While I used to be a use-it-while-you-got-it splurger, now that I’m officially a post-college adult, that kind of spending no longer flies. So what do you do with that extra money each year? Maybe one of these top ten tax refund uses will catch your eye.
1. Get caught up on old bills
This is a great time to play catch up! Pay off any outstanding bills before it’s too late. If you’re in a pickle, sometimes a tax refund can be a saving grace.
2. Build your emergency fund
They say you are supposed to have 3-6 months’ worth of expenses stashed away for emergencies. A tax refund is the perfect time to put more money toward that important fund. It may come in handy one day!
Use your money to make more money. Invest in something: the stock market, bonds, mutual funds, the list goes on and on.
4. Home Improvements
Now is the time to upgrade that 30-year old refrigerator or re-paint the hot pink bedroom. You’ve got the extra money and a quick renovation is sure to add value to your home and you’ll feel better getting it done.
Feeling generous? Donate some extra money to your favorite charity. You’ll feel good knowing it’s sure to be put to good use and you’ll score some extra karma points.
6. Save your refund lottery
Have you heard about this? Because it’s kind of awesome. Saveyourrefund.com encourages people to save at least some of their tax refund with cash incentives. If you save at least $50 somehow (savings, IRA, bond, etc.), you can enter their lottery of savers and possibly win $100-$10,000 dollars! Looks pretty cool to us.
7. Large purchase
Have you needed all new tires on your car for a while now? What about that new phone you’ve had your eye on, since yours barely turns on anymore? Make a large purchase while you have the money instead of adding it on to your usual expenses.
8. Pay off debt
If you have a small loan or very little left on a loan, go ahead and pay it off. Save yourself the extra interest! If you have a huge loan looming over everything you do, put a little extra toward it with your refund.
9. Education savings account
If you’re feeling confident in your financials, consider putting some of your refund into an education savings account for your children. College is expensive. If you start saving now, you could significantly decrease the amount your children will have to borrow for school.
10. Splurge a bit
Last, sometimes it’s okay to splurge a bit! Take $100 off the top and buy yourself that expensive pair of shoes you’ve wanted for a year. Just be sure you don’t splurge all of it. A shopping spree may feel great in the moment, but saving money feels great in the long term.
*Don't forget, Decatur Earthmover Credit Union members can save up to $15 when filing taxes with TurboTax.