It’s that time again and let’s face it TAX TIME! With refunds being filed and early advances being deposited the biggest question for some is how to spend it to get the most bang for their buck. Many people get huge amounts of money and in days it’s gone. Worse off they often have nothing to show for it. How do I know this? Because I am the queen of spending a huge amount of money in a very little amount of time. I got a trust fund when I turned 18 and within a week 10K GONE! And I did have some things that lasted a little but mostly I had regrets because there were 50 ways at least I could have done better with my money. So Today I wanted to bring you 5 things you can do that will help you have less regrets about where your money goes or at least be responsible choices that can help you stretch that money and maybe even make more! So let’s get started!
1. Pay Your Bills Ahead
A famous saying that I love to say when things continually go wrong is, “If it isn’t one thing it’s another”. This is a saying I and many others love all too well when things just won’t fall in place. And unfortunately that sometimes means we don’t have the money for bills, food, gas, or something unexpected comes along that may not been in the budget. Sometimes we lose a source of income. Sometimes we have a medical bill insurance didn’t cover. However no matter what it is using your tax refund to pay your bills a month or two ahead can lift some of the pressure and costs off of you when things go wrong. My husband and do this every chance we get and it definitely relieves the pressure when unexpected things come up. Unexpected things will always come about but its nice to have that wiggle room in the budget when they do so it isn’t a stress factor. If you have a bill that doesn’t allow you to pay ahead or that isn’t as beneficial to pay ahead, such as a credit card where you need each monthly payment to help build credit easier, you can alternatively set up a savings account where the money can auto draft from or that you can transfer the money easily to pay the bill when due and just leave it be. However many people struggle with this option and having the will power to leave the money be knowing it is there it’s still a great option to have just make sure you account for any fees that may come out as well. Now the key to paying your bills ahead and staying ahead is that once you pay ahead go ahead and keep paying them or adding to a savings account for those bills so that the money is there and the bills are paid. That way you are still prepared for the future because let’s face it bills don’t stop.
When you say invest people automatically think stock and businesses. And in this case this is exactly what we mean! While an investor in the stock market I am no professional. So I will not be giving investment advice for what stocks are best (and let’s face it it is always changing). However taking the time to learn about the stock market and finding a broker or firm that you can trust is a good way to start. This is also a great time to start that passion you have as a business. Move over hobby. Tax refunds are great ways to invest in product, marketing, and vendor events to get your name and brand out there. Many people dream about quitting their full time job and working for themselves and about every 1-in-3 Americans have a side hustle. So why not invest in making it a full time consistent gig? I’m not saying quit your day job I’m saying invest in your dream so you can start day dreaming on a daily basis instead!
3. Get a CD
If you’re looking at your tax refund and you’re saying, “this is really just blow money for me”, DON’T. If you have no immediate need for your cash put it in a CD where it will grow interest. Many banks offer CD’s and they are generally easy to start. However understand from the jump a CD is a long term commitment. So be prepared to sit on it for a bit and not touch it. Just let it grow and then when it matures pull it and you can put it back into another CD or you can invest it elsewhere. With a CD while a long term investment it is your money so you can pull it out early but be prepared to pay fees and it definitely isn’t as beneficial as leaving it.
4. Real Estate
Real estate is a hot market right now and there are many properties ready to be grabbed up. Whether you’re looking for a forever home or you’re looking to invest and get another stream of income, Real Estate is a great way to do both and your tax refund can help. While many Americans average about 3 grand for taxes most people get much more and personally I know people who get back as much as 10 grand give or take. That 10 grand is a great place to start with your down payment. It’s also a great amount to start and invest into a rental property. Real Estate is not always business where you can get it and flip it quick so if you are looking for a long term investment or income stream this may be a great route for you to check out. If you’re looking for a quick buck this probably isn’t the path to walk.
5. Dependable Transportation
There is quite the bad stigma about buying a vehicle with your taxes. However buying a good dependable car is always a good way to spend your taxes if you need the transportation. Transportation gets us to school, work, and doctors appointments. It keeps us from freezing in the cold months and cool in the hot months. Buying a vehicle from a private buyer is always dicey however it is a good option. You will also find (something many people don’t know) is that often times car lots (I’m not talking buy here pay here’s but they do as well) will have cash cars. Cars that they can let go of for low prices but have been inspected and worked on to be dependable when you drive off the lot. Maybe it’s a year beyond what a bank will finance or has 100 miles too many to be financed by a bank So the lot will sell it cash in hand. Another good way to get a vehicle is if you use part or all of your taxes to put as a down payment on a vehicle. You can find great priced used and new vehicles on most lots. Sometimes the bank will even accept rougher credit situations if you have a bigger down payment and lets face it we all know that the bigger the down payment the smaller the payment plus the less you end up paying because you won’t pay interest on any part of the cost you didn’t finance. Before checking Facebook market I most definitely recommend that you go to a local ford, chevy, Nissan, or whatever brand you like and checking out your options there and if a payment is in your budget and its an option ta-da and if not there may be an option for a cash car in your price range that you never would have known was an option and that you can depend on for your family.
There are many ways to spend your tax refund and many ways you can make the most of it as well for your situation. Before heading to Target or Walmart make sure that you look at all the options and you see if there are any that would better benefit your family in the long run before making decisions. Make a pros and cons list and then sleep on it. You can usually make better decisions if you lay out the facts, consider the long term effects, and sleep on it a day or two to wake up with a clear head to the situation.
Make smart choices! Grow and glow! and until next time!