7 Ways to Use Your Tax Refund, PWK Style
What is a tax refund?
It’s the amount of money you over-paid in taxes throughout the year, which you’re now getting back. That said, a larger tax refund isn’t necessarily a good thing – it could mean that you may need to take some time to re-analyze your W-4 (or 1040-ES if you’re self-employed) to make sure your withholdings are up to date.
So, what should you do with the money you get back? Well, that part is up to you, but, now that we've learned from the best, we’ve pulled together seven smart spending suggestions to help guide you in that decision. Our advice to you: Give your money a PURPOSE!
1. Save it for a rainy day Start or add to an emergency fund – something finance pro Dave Ramsey talks about pretty frequently with his Smart Dollar program (we're big fans!).
2. Pay off debt Credit cards, car loans, student loans, etc. Get rid of it! These apps might help.
3. Contribute to a goal Saving up for something big, like a vacation out of the country or buying a new house? Add your refund to your savings goal and get ahead of the game. Every little bit counts!
4. Add to the kids’ college savings fund Trust us, they'll appreciate it! Never too early or too late!
5. Give it to charity You’ll feel great about doing it, and be rewarded when tax season rolls around again next year.
6. Spend it on something you need Putting off house repairs? Now could be the time to take action!
7. Spend it on something you want This one’s obviously the most fun. No guilt – you earned the money, now spend it how you want! Maybe even upgrade your phone (just sayin' ;) )?