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This is the time of year some families eagerly look forward to, while others dread it, tax season! When I was working in retail, it was very evident when the refunds would start rolling in. Families would shop and spend money like it was as simple as picking it off a tree. If only it were really that easy, right?
If you are expecting a refund this year, before you spend it mentally, why not consider what would be best for your family’s finances and make the most of the money you receive back!
6 Smart Ways to Maximum Your Tax Refund
1. Emergency Fund – If you don’t have an emergency fund, this would be my first suggestion! We all know that life happens at the most inopportune time and if we are caught unprepared it can make a bad situation worse. While it is suggested to have 3-6 months of expenses tucked away, for most of us we are not even close. Taking a large chunk from your tax return is a great way to jump start your emergency fund without making a dent in your budget. After you have invested into your emergency fund, it is exciting to watch it grow with small weekly deposits from the 52-week challenge.
2. Pay off Debt – If you have any high-interest debt, using your refund to pay it down or off is like putting money back in your pocket, literally! If you sit down and figure the amount of interest you may be paying monthly, you might be surprised.
3. Savings – If you are planning a vacation, saving for a vehicle or perhaps your first home, put it into your designated savings account. You will never regret giving your account a good boost when you go to make your big purchase or are relaxing on the beach.
4. Annual Expenses – This is usually where a good chunk of our past refunds have gone towards. We take the opportunity to pay annual expenses such as homeowner’s insurance, car insurance, prepay our heating source for the coming winter, pay personal property taxes, life insurance…you get the idea. It makes our monthly bills so much easier to manage because we pre-pay so many big expenses at the beginning of the year.
5. Purchase Items you Need/Home Repairs – Rather than go out and purchase that flat-screen TV you have been eyeing, think about items you really need. Does the refrigerator need to be replaced? Do you have dental work you have been putting off due to lack of funds? Maybe you do really need a few new pieces of clothing and just don’t spend money on yourself, using your refund may make it a little easier to do so. What about the leaking faucet or air conditioner that needs a tune-up? Spending the money to maintain what you already own will extend its life so you do not have to spend even more to replace it.
6. Invest in Your Business – Everyone may not have a business to invest in, but for those of us that do, there is truth to the words, it takes money to make money. Maybe you are in need of new equipment or need a new service that you haven’t been able to invest in yet. With a tax refund, it may be wise to set some aside to purchase items to help your business to succeed. Being a blogger, having a reliable computer, a great DSLR camera and awesome smartphone to stay connected are all vital.
Although our refund this year is no where close to where it was in the past, this last year I had the chance to try out several phones from Walmart Family Mobile. I love the features of the ZMax Phablet. It is a phone/tablet combination with the ability to have all the functions I need on the go. Since I have had the chance to use one, I thought now would be a great time to upgrade the Hubby’s phone with our tax refund. He has started helping with some of the backend of the blog and being able to stay connected is so vital. The 4G LTE data is a huge upgrade! Who can complain with greater speed?
The Walmart Family Mobile service is $29.88/month (for the first line) for Unlimited Talk, Text and Data/Web service plan which includes up to 500MB of 4G LTE data. With phones as low as the ZTE Zinger for $19.84 (was $39.88) you don’t even have to invest a large amount to take advantage of the 4G LTE data! Second lines are as low as $24.88, so think how much you can save switching two or more lines?
So before you head out to blow that extra money, sit back and think about how long it takes for you to earn that amount of money. What would be the best way for you to maximum your tax refund. These are a few great ways to maximize your tax return.