IT’S TAX SEASON… For many Americans, the first word that comes to mind is: REFUND!!!
The 2017 filing season opened on January 29, 2018, so by this point I am sure many of you have already received your IRS Refund. People have mixed feelings when it comes to tax refunds: some look at this as the government repaying them the money they should have been able to use throughout the year while others look forward to this annual act of “finding money”.
No worries, I will post more blogs on tax planning for those who would prefer to keep their money during the year and balance out at year-end.
So, the refund has hit your bank account. STOP!!! Before you “do it for the gram”, let’s discuss 8 smart money ideas for your refund:
1) Start Or Increase Your Emergency Fund
An essential part of adulting is preparing for the rainy days. Though putting your refund in a high-interest bearing savings account will not yield the highest possible return, it will provide a return while the money is not being used.
2) Pay Off Debt
As we focus on this path toward financial freedom, opting to pay down/off debt is always an ideal choice. Depending on the size of your refund, this could impact you in more ways than one. For example, paying down a credit card balance will not only reduce or eliminate the monthly minimum payment owed, but it will always increase your credit score.
3) Fund Your Retirement
Regardless of your age, funding your retirement should always be a focus for NOW rather than LATER. If you’re not sure where to start, then consider opening a Roth IRA. I will elaborate on retirement in an upcoming post so stay tuned for that latté.
4) Invest In The Stock Market
Similar to your retirement funds, choosing to invest in the stock market sooner than later is ideal. If you aren’t comfortable making this jump alone, that is completely understandable. Consult with a financial advisor to help determine your risk tolerance and get your portfolio started. I will advise that regardless of the professional advice you seek, it is always wise to fully understand where your money is going.
5) Home Improvement
Using your tax refund to make home improvements can always be helpful. Whether it’s painting a room or finishing a later project, your home should always be comfortable. Depending upon the type of home improvements completed, it may increase the value of the home.
6) Prepay Mortgage
Majority of homeowners are aware they have the option, but few understand the great degree of benefit that is derived from mortgage prepayments. Mortgage prepayments not only decrease the future payments but also increase the amount of equity in the home. Some investors even view prepayments as a top retirement strategy.
7) Invest In Yourself
I cannot stress enough the importance of personal development. If you don’t sow into your life and bet on yourself, then how can you expect others to bet on you. We’re on the pursuit of good to great. Purchase some new books, enroll in a course, invest in a lifecoach.
8) Start A Business
The average millionaire has approximately seven streams of income. What are you waiting on?? Let’s go get it!!
