Are you expecting some money back from Uncle Sam this year? Before you take a shopping spree consider these wise ways to spend your tax refund and use your money to improve your financial situation.
Pay Down Debt
Reduce or try to eliminate as much debt on credit cards that you can. Not only will this help save you interest in the long run, it may also help you free up more money every month by reducing your payment.
Start a Rainy Day Fund
Medical bills, car or home repairs, and other unexpected expenses can quickly create or worsen a financial crisis. Using all or part of your tax refund to start or build up your emergency savings can help ease some of your financial stress.
Spend on What You Need
It’s easy to want to spend your money on the latest gadget, but instead use your refund to buy something you need. Does the car need new tires or brakes? Have you put off going to the doctor or the dentist? Do the kids need new coats? Use your refund for a need versus a want.
Sure, that new phone or outfit would be fun, but paying a large portion of your credit card balance, starting a savings account, and taking care of other financial obligations will benefit you long after the newest trend isn’t so new anymore.