What will you be doing with your income tax refund?
Here are 25 ideas for a large income tax refund. I’ve broken it out into different sections to make it easier for you to find something of interest. Here goes:
Debt
- Pay off your credit card debt If you are carrying credit card debt then a large tax refund can be your opportunity to put a dent or eliminate your credit card debt. Pay it off and you save by not paying as many interest charges!
- Pre-pay your mortgage You can take that refund and pre-pay your home mortgage. This will also save some interest payments over time.
- Pay off your student loans If you have private student loans, now is a great opportunity to pay some off. Even if they aren’t private loans you can still make some extra payments to help get rid of your loans earlier!
- Pay off your car loan – Pay off all or at least some of your outstanding car loan. Make sure the payment goes toward the principal.
Savings/Investing
- Contribute to an IRA Get money into your IRA now so you aren’t waiting until the last minute next tax season.
- Contribute to a 529 plan Not only are you investing in your children’s college future but many states offer plans with tax advantages.
- Put it into a high-yield savings account Sock it away and earn better interest than you would n a brick and mortar bank.
- Purchase CD’s Set up a CD ladder for continued returns.
- Start a small business It doesn’t take a lot of money to start up a small side business. You could even try your hand at creating a website!
- Build of your emergency savings – If you don’t already have 8-12 months of emergency savings away then now would be a good time to start!
- Invest in stocks Take a small amount that won’t hurt you if you lose it and learn to invest in stocks. You can open up an inexpensive online brokerage account like Sharebuilder.
Fun/Family/Enrichment
- College Course Register for a college course or technical course. This could be for your own interest or as a way to help advance your career.
- Travel/Vacation Take the money and run! Ok, maybe not like that but it could be a nice chance to plan out a great vacation with the family!
- Fix up your home “Paint, renovate, upgrade appliances, get new furniture” make your home a nicer place to live in.
- Set up a fun money account Take the refund and put it into a sub-account in ING (or a similarly good savings account). Label it fun money. Throughout the year take money out to do things like go to the zoo, amusement park, museum, movies, etc.
