10 Things to do With Your Tax Refund
Tax Day 2012 is right around the corner. Taxpayers have until April 17, 2012 to file their 2011 taxes and if you're expecting a refund there's no better time than now to file. In my opinion, the quicker you receive your refund the better. Once you receive your refund, though, the real work begins. How are you going to spend the small influx of money? Will you pay down debt, save it or buy yourself something special? If you're having trouble deciding, check out these 10 things that you can do with your tax refund.
1. Pay down your debt - If you have revolving consumer debt, consider dedicating your entire tax refund to your debt. As soon as the refund hits your bank account make a credit card payment in the same amount so that you aren't tempted to spend it.
2. Make an extra mortgage payment - Want to use your refund for debt but don't carry credit card debt? Make a one-time principal-only mortgage payment.
3. Student loan payment - If you earned a degree with a side of student loan debt upon graduating from college, consider making a one-time lump sum student loan payment. The sooner you can pay off your student loan, the better!
4. Open a Roth IRA - Invest in your future and use your tax refund to open a Roth IRA. Consult with an investment professional, first, to make sure that you qualify for a Roth and to determine if it is the best option for you.
5. Save for your child's college expenses - Parents may want to put tax refund money aside for their children's future. Look into opening an Educational Savings Account but definitely meet with an investment advisor first.
6. Family vacation - Depending on how big your tax refund is, you may have enough money to take a family vacation. To borrow a line from Mastercard, the time you spend together may be priceless. You just can't put a price on lifelong memories.
7. Start an emergency fund - If you don't have a cash emergency fund, start one with your tax refund. Even a $1,000 cash cushion could give you a little more financial peace of mind.
8. Continuing education - Depending on your field, you can use the tax refund to pay for a continuing education workshop. If you're in web design and you want to learn the latest technology, the money you invest in a course could potentially have a great return on investment.
9. Donate it - Feeling generous? Consider donating your tax refund to your favorite charity.
10. A little bit of everything - If you just can't decide what to do with your tax refund, do a little bit of everything. Make an extra credit card payment, put a little in savings, donate some of it and spend a little bit on yourself or your family.
If you're receiving a tax refund, what do you plan to do with it?
Mother Nature Network