Its tax season! Have you started rounding up all then necessary documents needed to file your 2020 taxes? Don’t wait too late! Before you know it, the deadline will be here so get started on submitting your documents to your Tax Advisor or researching what may be new if you plan to tackle them yourself.
I typically use a free software like Tax Advisor or H&R Block to get mine done, but this year, I am handing it off to a professional for some extra help and to alleviate some stress.
Depending on your status, you may or may not be receiving a refund. If you end up owing, you may want to have a discussion with your accountant or tax advisor to revisit your withholdings and make adjustments so that next year you aren’t blindsided with unexpected repayment requirements.
However, if you are expected to receive a return on your taxes this year, take advantage of this by investing it into something worth while. Instead of spending it on another pair of shoes or upgrading your perfectly functioning television, put your refund to better use.
Its only natural to plan out in advance, what you will do with money prior to it materializing. Thats ok! Instead of thinking of useless, non beneficial items to spend your tax return on, think smart. Here are 8 great things to reinvest your tax refund:
Credit Card Debt
Tax refunds are perfect to use for splurging on paying off your accumulated credit card debt. If you have a goal of reaching the lines of being debt free this year and your existing credit cards woes are currently stopping you from achieving that, nows your chance to work towards getting things under control.
Student Debt
Another daunting financial responsibility a lot of us have to deal with is student loan debt. With the 2020 Elections underway and student loan debt being a huge topic of debate amongst the candidates, we are all hoping this year we’ll have a real solution this suffocating financial crisis once and for all. In the mean time, until a plan is in place, we still have to grapple with the reality it exists for most of us.
Education
Thinking about going back to school? Currently working towards a degree or skill? Wanting to put away money for your children’s education? Paying for an education is intimidating. Saving for one can be even harder. Depending on the size of your return, you may want to invest the entire amount into your education or save for you child’s, especially if you can afford to.
Invest in Yourself – Seed Money
Thinking of starting a business or currently running a business want to launch some new ideas but need some seed money? Invest your tax return in your own business! Keep your vision going by being your own angel investor. As the pool of entrepreneurs continue to increase, so will the number of hurdles enforced by financial institutions for those looking to obtain approval for seed money. This may mean self investment for a little longer until you’re able to fully prove worthy of a the risk.
Stock Market
The stock market is not just for the wealthy. Buying shares in another company could be a great way to take your existing finances to another level. There are a lot of great investment companies out there to assist you with your stock investment options. Do your own research of course, but, don’t feel like you have to do this alone. Educate yourself on some basic knowledge, but feel free to contact professionals by phone for some additional help. Know that you have resources and use them to your advantage.
Stack Your Savings /Emergency Fund/401(k)
Out of sight out of mind! Saving for a rainy day is important in this unpredictable economy. Things come up and when decisions need to be made, it is nice to have a fund available to reach to for relief. Scrambling to find money is not fun, so do your best to eliminate the possibility by developing a savings. Don’t take for granted that your living month to month will be enough, or that a savings is necessary.
Prepay Bills
Relieve some of the stress from keeping up with due dates by paying in advance. This could mean up to 6 months or more of not having to worry about meeting the deadline of some of your financial responsibilities. This will also ease tension and lower your stress levels since you will not be so concerned and stressed out about what may be upcoming and keeping mental notes of when to pay, missing out on late fees.
Vacation
All work and no play can be exhausting. Self care and appreciation is just as much necessary as is tending to your personal responsibilities. I strategically placed this one at the end of the post, to remind you that while it is important to invest in your financial obligations, you must also keep in mind that incorporating some fun, will give you a reason to stay on task and continue to make intentional decisions.