Skip to main content


How To Put Your Tax Refund To Good Use

It's tax return season, and your refund may be coming soon. You may have goals for your future, such as saving for a vacation or paying down debt. How do you stick to the goals you set at the beginning of the year when you get your tax refund? Here are four tips on how you can save, budget, and even spend your tax refund.

Person counting coins
Photo by Towfiqu barbhuiya on Unsplash

Create A Budget

A budget for your tax refund can help you spend it in the areas that you designate are the most important. You may need your tax refund to pay for rent, groceries, childcare, saving for an emergency fund, or your child's education. Creating a budget for your refund can help you ensure that every dollar is helping you achieve your goals. Once you determine how much your refund will be, create a list of how much you are going to pay towards each category. For example, will you spend $600 toward your rent, $500 to start an emergency savings account, and $100 on entertainment? Having your tax refund budgeted in advance can help you achieve your savings and spending goals.

See my feature on Yahoo where I discuss 8 Simple Ways for People in Their 20's Can Begin Saving Now

Create a Debt Action Plan

Sometimes debt can get out of hand. It seems like it's a never-ending cycle of juggling to pay one credit card bill or loan after another. Using your tax refund to create a debt action plan can help you eliminate or reduce your debt. There are a couple of ways that you can pay off your debt. 

The first one is to pay off the smallest debts first. If you have a $100 credit card bill, you can start here and subsequently tackle your more significant debts. Paying off smaller debts and working on the increasingly larger ones can help you reduce the number of creditors you owe money to. The second method is to pay off your high-interest accounts first. If you have one credit card where you pay 23% interest and another you pay 6% interest to, then paying off the higher interest rate credit card can eliminate the extra fees you are paying towards your purchases.

See my feature in 11 Best Personal Finance Formulae To Live By

Plan To Save

If you have a debt plan or limited debt, you can save your tax refund. You can save your tax refund for a future vacation, emergencies, car purchase, or any other future goals on the horizon. Saving all or a portion of your tax refund can help you achieve your savings goals and reduce the need to borrow money in the future. So, how do you save your tax refund? When filing your taxes, you can choose to have your tax refund direct deposited directly into your savings account. This way, you're not tempted to spend the money when it gets deposited into your checking account. You can also purchase savings bonds with your tax refund. Buying savings bonds is an option when working with a tax refund preparer or filing your taxes on your own. Both of these options allow you to build your savings and gain interest on your deposits. 

Spend A Portion

Sometimes we have to treat ourselves or our family, and spending a portion of your tax refund can help you do just that. Whether you want to have dinner out, go to the movies, or get your hair professionally done, treating yourself with a portion of your tax refund is okay. Just be mindful of your other goals and predetermine the amount of your tax refund that you want to use to treat yourself. 

Whatever option you choose to manage your tax refund, ensure that your money works for you and not against you.


Popular Posts

6 Things To Do When You Get a Raise

What is one thing someone should do when they earn a big promotion and raise at work?  To help you make the best out of your promotion and raise at work, we asked business leaders this question for their best insights. From expressing gratitude to updating your resume, there are several pieces of advice that may help you make the best use of your promotion and raise at work.  Here are six things to do when you get a raise: Express Gratitude Make Smart Decisions Avoid The Trap of Overspending Improve Your Quality of Life Adjust Your Monthly Savings Update Your Resume Express Gratitude The concepts of the self-made man and overnight success have begun to unravel as professionals start to recognize the contributions of others. After a big win, it’s tempting for hard-chargers to set the next goal, but allow yourself a moment of reflection. Consider what you learned from the victory and who helped you along the way. Then, thank them and commit to repaying the kindness. Mentors move mountain

4 Ways To Save For Retirement as a Tipped Employee

How can you save for retirement while working in a tipped position with no benefits?  To help you save for retirement as a tipped employee, we asked thought leaders this question for their best insights. From exploring tax-advantaged plans to tapping the features of cash value life insurance, there are practical options that may help you save long-term for retirement.  Here are four ways to save for retirement as a tipped employee: Set Up 401(k) and Invest in ESPPs and ESOPs Limit Spending and Save Explore Tax-Advantaged Plans and Related Options Tap The Features of Cash Value Life Insurance Explore Tax-Advantaged Plans and Related Options No access to an employer-sponsored retirement plan like a 401(k)? You can still contribute to a tax-advantaged retirement plan if your income is documented on a 1099 or W-2. The earned income could allow you to make a tax-deductible contribution to an individual retirement account (IRA). More options exist for those with income reported on a 1099 for

8 Tips To Nail a Virtual Job Interview

What is one tip you have for candidates preparing for a virtual interview? To help you do well in a virtual job interview, we asked hiring managers and experienced recruiters this question for their best advice. From being well-prepared and engaging to maintaining eye contact with the interviewer, there are several pieces of advice that may help you perform well in virtual job interviews. Here are eight tips for nailing virtual job interviews: Be Well-Prepared and Engaging Test Out Your Environment and Technology in Advance Turn Off Notifications On Phone and Computer Speak With Confidence and Be Authentic Write Down Things To Refer To During The Interview Focus On the Fundamentals Show Interest and Stay Engaged Maintain Eye Contact With The Interviewer Be Well-Prepared and Engaging  Stay in the moment for a virtual interview. Though “stay in the moment” might seem cliche or vague, this adage encapsulates patience and awareness and works best with deep breathing. Research, practice, an