Did you know your tax refund may be smaller this year? That’s why it may be even more important than usual to consider the best ways to spend or invest your extra money. Check out 5 ways you might use your tax refund:
1. Add To (or start) An Emergency Fund with Your Tax Refund
An emergency fund is for those times in life when the unexpected happens. If you have a medical emergency, there may be medical bills associated with care. If your furnace breaks, you may need a costly repair. If you lose your job, you may need to get by until you find new employment.
Most financial experts will tell you to have enough money set aside to cover three to six months of expenses. But the amount you may need depends on your monthly costs, income, debts, and lifestyle.
If you have an emergency fund already, you could choose to use some of or all your tax refund to add to it. But if you’re like most people who live paycheck to paycheck, your tax refund may be a good way to get an emergency fund started. Every little bit helps!
2. Use Your Tax Refund to Start a College Fund
Maybe you want to go back to school. Or maybe you want to help your children pay for college in the future. You might choose to use your tax refund to save for higher education through a 529 College Plan that may offer tax advantages. Talk to a financial professional to learn about options that might be right for you.
3. Contribute to a Retirement Plan with Your Tax Refund
Even if retirement seems a long time away, you can prepare now. Consider a contribution to a traditional or Roth IRA or consider using your tax refund to get one started. As always, consult a financial professional before you invest.
4. Invest In a Small Home Project with Your Tax Refund
Your tax refund may not cover a full home remodel, but you could choose to put it toward smaller projects. For example, you could decide to upgrade to a smart thermostat, insulate your attic, or change to smart lighting. Low-flow toilets and shower heads often help you save water which saves money. A tankless water heater may save on both energy and water. Some short-money projects may save you money in energy and water bills down the road. Alternatively, you may choose a DIY project that just makes your space feel like your own; a fresh coat of paint can do wonders.
5. Use Some of Your Tax Refund to Do Something Special for YOU!
You might also choose to use your tax refund to have a little fun. Maybe you want to take a cooking or woodworking class, have a family movie night, or go on a date night with your significant other. What are your plans for your refund?
Make sure to submit your tax return by the due date: Tuesday, April 18th. If you live in a state affected by natural disaster, such as Alabama, California, or Georgia, check your state for deadline extensions. At Mariner Finance, we love to hear how our customers utilize and invest their money. And when they need a little help, we’re here to assist in applying for a personal loan that fits their unique needs. Let us know how much you might need to borrow.
