Tax refunds – Top 5 ideas to spend it effectively | Personal Finance Views

Monday, March 30, 2015

Tax refunds – Top 5 ideas to spend it effectively

The last date to file your tax is August 31st, 2015. Once you file your taxes within that date, you are due to receive your tax refunds within a short span of time. There are many people who will be receiving a quite a big amount in tax refunds. Many are planning to use it to go for a vacation while others are planning to buy some costly electronic item with that. Why not use your tax refunds in a constructive way so that it helps you later on? Let’s take a look at the top 5 ways which will help you spend your tax refunds effectively and manage your personal finance in a better way:

1) Pay off you debts

One of the best ways to utilize your tax refunds is to pay off your secured and unsecured debts. You may have credit card debt, medical bills, student loans, etc. to pay off. You can use the tax refunds to pay off any of these debts in full. You can even partially pay off all these debts so that you owe less to every creditor. In case you don’t have any unsecured debts to pay off, then you can utilize the tax refunds to pay off a certain part of the principal amount of your mortgage. In the long run, this will help you pay off your mortgage fast. Thus, you will be able to manage your personal finance well.

Tax refunds

2) Build up an emergency fund

Though you save money every month, in your checking account, make sure that you have an emergency fund as well. You can invest your tax refunds to build up an emergency fund for yourself and your family. This emergency fund will be of great help to you in case of any medical or financial emergency. Your family will feel safe due to this emergency fund. Also, you won’t have to contact others for money in times of need. If you already have an emergency fund, then utilize the refunds to increase the fund amount.

3) Retirement account

Golden years are special. You should make sure that you have enough money to sustain yourself for those golden days of your life. If you haven’t invested anything for your retirement, then this is the high time that you do so. You can use the tax refunds to build a retirement account which will help you remain self sufficient when you won’t have a job or when you won’t be able to work.

4) Make your home energy efficient

You must have paid quite a lump sum amount in the name of utility bills. You can avoid that if you wish to do so! You can utilize your tax returns to make your home energy efficient so that you can save money on your utility bills. Moreover, if you make your home energy efficient now, then it will reduce your utility expenses for the next few years. Thus, you will be able to save money for a long period of time and can even claim further tax refunds in the coming years.

5) Boost up your career

Everybody dreams big and wants to earn more money to have a sophisticated life. Invest your tax refunds in your career to make it big. Join a new course or enroll yourself in some university for further studies so that it can help you grow in your profession.

Hope these 5 effective ideas will help you use your tax refunds in a better way!

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