Wondering how to spend your tax refund from the IRS?
About 13% of Americans will put their tax refund towards an amazing vacation and 39% will use it to pay down their debts, according to a study from 2015 conducted by the National Retail Federation.
How will you spend yours?
A big refund might feel like you’ve hit the jackpot, but it’s not always wise to spend it all at once. You might consider a more practical plan for your cash.
Here are some tips on how to spend your tax refund wisely:
Make a plan
Firstly, think about your current financial situation and how your tax refund could influence your short and long-term financial needs. Having a clear plan on how to spend your tax refund can greatly improve your future financial health and help you develop financial management skills.
Pay off your credit card debt
This might be the first and probably smartest idea that comes to the practical mind when it comes to getting a tax refund. And yes, paying off your high-interest credit card debt should be number 1 on your “smart-ways to-spend-your-refund” list. It might not be ‘fun’, but it will be such a relief to start afresh financially and when you finally have the money you need, you should definitely get your debt matters in order.
Start your emergency fund
Maybe this idea sounds better suited to someone in their forties? Well, you might think this way until the ‘emergency’ arises and you realize there isn’t a penny left in the piggy bank. Emergencies don’t just happen to people in their forties, and often occur suddenly, so an emergency fund will give you that welcome cushion to land on when you need it. That’s why putting aside part of your tax refund money (not necessary all of it) will prevent you from getting off-guard.
Finance your education
Using your tax refund to buy college or university textbooks, to start additional qualifications courses or sign up for an eBook subscription service, is a really smart way to spend it. The price of textbooks is constantly rising and next semester these could burn a hole in your pocket unless you’ve set some money aside. This could save you the usual money troubles you’ll likely encounter at the beginning of the semester and what’s more, will pay you out a hundred times in future.
“StartUP’’ your future
Remember that amazing business idea you promised to develop when you got enough money? Well now is the time! Startups are a huge part of the business world and if this is what you’ve been dreaming of, why not start today?
If you’ve got the idea, now you have the budget to make it happen! Get a pen, draft your first business plan, and give your dreams a head start.
Travel to a new destination
Invest in memories – the experiences you gain from traveling the world are worth more than any classroom education or savings account.
Travel is not as expensive as you think either. There are many ways to see the world without going broke or spending your entire refund.
First, pick a destination. Anywhere in the world! Not sure where you want to go? StudentUniverse has an awesome tool called FarePlay where you select where you’re flying from and either the region you want to visit or type of trip you want and they give you the best destinations and prices.
Next, find a cheap student flight. Search for deals where you can use your student status to get awesome deals on airfare around the world. On StudentUniverse.com you can find special fares just for students or youth 18-25 years old.
Once you figure out where you’re going and how you’re getting there, you need to find a place to stay that isn’t expensive but also won’t leave you staying in a dungeon in the “bad part of town.” We recommend hostels or hotels with student rates. Just like flights, there is such a thing as discounted accommodations for students. If you plan on booking on the go, we recommend a mobile app like WeHostels or the StudentUniverse app.
Save or spend your tax refund? The final say is yours.
What we at Sprintax can do for you is help you get your maximum refund.
