It is tax season! Both good and bad can come from this time depending on your current financial status. If your situation does involve you getting money back, it is a good idea to have a plan on what to do with that money. Below I am going to provide 5 smart ways to use your tax returns.
1. Pay off your high interest loans
Help start your year off debt free! Not only should you pay off your high interest loans, you should try to pay off as many loans as possible, if you have more than one. You should make payments towards your payday loans, installment loans, student loans, car loans, credit card debt, etc.
2. Create an Emergency Fund
Having an emergency savings account is a good thing to do. You never know when life is going to throw a curveball at you, so it is good to be prepared. Experts say you should have 3-9 months of expenses saved in your emergency fund. However, if you don’t have one, start one. You can do so by keeping note of your weekly and monthly expenses, setting a savings goal, then create your plan to begin saving, and actually follow your plan. Here is a link to a calculator that will help you calculate how much money you should have in your emergency fund https://www.moneyunder30.com/emergency-fund-calculator.
3. Save for Your Retirement
It is never too early to start preparing for retirement. For example, at age 25, if you just put a couple thousand dollars each year in the right accounts for 10 years, there is a chance you can multiply that money by 10! Research your options and the course of action best suited for you. Here is a link that provides helpful tips on how to go about starting your retirement. https://www.bankrate.com/retirement/top-10-retirement-tips-for-2017/
4. Make Home Improvements
Are your gutters working? Do all of your appliances work? Thinking about installing an alarm system? How is the yard looking? These are all great questions to ask yourself upon getting that extra cash. Making any improvements that may be necessary for the function of your home is always good.
5. Invest In You
There is nothing wrong with taking a little money and spending it on something youreally want. That may be a new pair of shoes, a nice watch, tickets to the next big game, or a spa day.Therefore, you should set aside a little bit of money for your own personal use.