Content provided courtesy of USAA | By Angela Caban
If you’re expecting a tax refund this year, chances are you are already thinking about how to spend it. Have you thought about where this additional money can put you financially? Think of your tax refund as just another paycheck that comes in, and give that money a purpose.
Here are some smart ways to spend your tax refund:
Start or add money to your emergency fund
If you don’t already have an emergency fund, perhaps this is the perfect time to get one started. You never know what life could throw your way, and many of us are one paycheck away from being in a serious financial crisis.
Pay down/off high-interest debt
If you have any loans or credit cards with high interest rates, pay them down or off completely. This will surely put your refund to work and help relieve some of those high monthly payments.
Apply a principal payment to your mortgage
You could potentially save thousands of dollars in interest when you make an additional payment straight into principal. Check with your mortgage company first to ensure there are no additional fees or penalties.
Perhaps you have a home improvement project you have been wanting to start, but just didn’t have the funds to cover it. Making repairs is not only good for you in the sense that you get to cross it off your to-do list, but it will also boost the value of your home.
Invest in you
While all of the above are ways to help you succeed and get ahead financially, you also need to remember that it is okay to invest in yourself. Whether that is taking a portion of your refund to invest in your education or health, those are two investments that you will reap the benefits of for years to come. Also, don’t be afraid or feel guilty about treating yourself out to dinner, or perhaps a date night with your spouse. You’ve worked hard and we all deserve a break.