What Should You Do With That Tax Refund?

It’s that time of the year again. The time when you file your tax return, cross your fingers, and hope you receive a refund.

If you’re in line for a refund – regardless of the amount – it won’t be long before you’re contemplating how to use it.

While there are an endless number of ideas for how to spend your tax refund, here are some of the more popular:

•    Pay down debt
•    Take a trip
•    Use it toward a big purchase, such as a new home or car
•    Home renovation project
•    Spend it on yourself

Looking at this list, it’s easy to see that some options are more responsible than others. For example, if you have student loan debt you’ve been trying to pay down, it may be best to throw your refund at it.

Conversely, no matter how badly you want to purchase a new big screen television, it may not be wise to use your entire tax refund to do so. Not when there are other areas of your finances that require more of your attention.

If all else fails – and you can’t decide how to spend your refund – there’s one final solution to consider: save it for a rainy day.

There’s absolutely nothing wrong with saving your money in the bank or investing it, such as in a certificate of deposit. This way, should you need it in the future, you’ll have a clear idea of where to find it.

So, there you have it. This advice should give you a basic idea of what to do with your tax refund. Maybe you spend it all in the same place. Maybe you divide it into smaller portions and spread it around.

As long as you have a plan you’re comfortable with, you’ll know exactly what to do once the money is in your hands.

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