Tax season is officially over! Hallelujah! If you’re one of the lucky ones who received a tax refund this year, then you may be contemplating the best way to spend the extra money. Before you go too crazy with the possibilities, we’ve created a list of ways to use your tax refund wisely. Our list of 5 Smart Ways to Use Your Tax Refund gives you ideas on how to make the most unexpected cash flows, like a tax refund. Check it out!
5 Smart Ways to Use Your Tax Refund
Pay Off Debt
When most of us get our tax refund, we can’t wait to spend it all. Afterall, it’s unexpected money, right?! Technically, that is true, it’s unexpected money. However, it’s money that is technically owed to you. Getting a refund means that you’ve actually paid more into the tax system then you were supposed to; in essence, giving the government your money in the form of a tax-free loan (it doesn’t sound quite as exciting now, does it?) Before you spend all of your refund, consider a financially-savvy move and pay off or pay down existing debt. It might not be as fun as spending the money, but having financial freedom will make you feel amazing.
Along with paying off debt, a smart way to fully utilize your tax refund is to add to or to create an emergency fund. Having enough savings in your bank to calmly handle unexpected bills or financial crisis’ is vitally important. If you or your spouse lost your job, would you be okay? If your kiddos get sick and have to spend long periods of time in the hospital, would you be able to cover the costs? Car accident? Plumbing leak? Washer and dryer break? We’re not trying to be ‘Debbie Downers’ here, instead we’re trying to be realists by planning ahead for real-life situations. Having an emergency fund allows you to be able to handle life’s many curve balls with ease and grace. If you don’t have an emergency fund yet, now is the perfect time to start one. Use some of that tax refund to have peace of mind for the future!
Contribute to a Traditional IRA or a Roth IRA
Both Traditional and Roth IRAs are a great tool to use to start saving for retirement. The difference between the two can be somewhat confusing, and you should always speak with a qualified financial advisor before investing. The main difference between a traditional IRA and a Roth IRA are the tax terms. A traditional IRA is available to people over the age of 49. Money is not taxed when it goes into the IRA, instead it’s taxed after it’s pulled out. This allows the money to grow interest on a higher sum. Ideally the user would be using the account to grow the money in a shorter amount of time, and thus pay less taxes. Roth IRAs are typically used for people under the age of 49. Money added to Roth IRAs is taxed as it goes into the account. This allows users time to grow the smaller money in the account to a larger sum, and therefore pay less taxes on the larger sum when it’s pulled out.
Buy A HAPARI Swimsuit!
It’s swimsuit season everyone, treat yourself to a new suit for summer! While we suggest not spending all of your tax return money, it’s a good idea to treat yourself to a little somethin’ somethin’! With summer on its way, you need a new swimsuit! Yep, it’s a must-have. Treat yourself to one of our gorgeous and immaculately constructed swimsuit pieces. The best part? We’re having a sale! Right now, score $25 OFF your purchase of $75 or more + Free Shipping with code: MY25 designed to say thank you to all of our loyal HAPARI fans!
Plan a Summer Road Trip!
Last but not least, we advise using some of your tax refund money to plan a summer road trip. After you’ve smartly used your tax refund in a financially-savvy way, plan to do something fun with your moolah! Our best advice? Plan a summer road trip with your family outdoors! Explore the many beautiful things in nature; whether you decide to do a weekend getaway to a nearby resort or spend a few days camping with Mother Nature, a summer road trip will be something your entire family will love.
The goal is to use your tax refund wisely to create a happier and healthier financial environment for you and your family. Using the money to pay off debt, contribute to an emergency savings plan or retirement plan is a great way to become financially savvy! Don’t forget to treat yourself too though! A HAPARI suit and a small family road trip this summer should do just the trick!
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