What to do with your tax refund

Wednesday, April 18th, 2012 By

Multiple $10 bills folded into a flower, origami-style.

Turn your tax refund into something beautiful. (Photo Credit: Public Domain/Evan-Amos/Wikipedia)

Tax refunds are on their way to many U.S. taxpayers. Along with a tax return comes the annual decision on what to do with your tax refund. The average refund for the 2012 filing season is $2,899, according to the IRS, $100 less than in 2011. In case you’ve forgotten, here are some sound ideas.

Make green improvements to your home

Home improvement is a never-ending process. Why not apply your tax refund to the type of energy-efficient fixes that can save you money in the long term? Green home improvement can make a difference on next year’s taxes, and such projects are good for the environment. Your heating and cooling bills will thank you.

[Personal installment loans can help fund home projects.]

Pay off (some of) your student loans

The next financial bubble that will drag the U.S. into recession is student loans, many financial experts believe. Help yourself by getting your student loan back into good standing, if it is delinquent or in default.

Splurge like you mean it

If you’ve been waiting to buy that 70-inch 3D flat-screen television, there’s no time like the present. Provided you’re on top of the more pressing financial matters, stimulate the economy with a big purchase. Or, if you prefer, try an energy-efficient washing machine or refrigerator. Maybe even a Jet Ski, because summer is right around the corner. If you can legally declare your purchase as a business expense, then by all means, do so!

Pay down credit card debt

This one is a no-brainer; revolving credit is deadly to a consumer’s finances in the long term. Eliminating credit card debt can aid your credit rating, which opens things up when you need credit for things like a home or automobile. In total, less credit card debt can mean greater peace of mind.

Get ready for doomsday

If you subscribe to the latest flavor of doomsday cult – or simply enjoy that bunker lifestyle – then your tax rebate can be used for this purpose. Buy non-perishable supplies, retro-fit your bunker and make sure you have enough crank-handled flashlights and radios to last until the next doomsday prophecy is uttered/interpreted. The zombies won’t like it, but that’s just too bad for them, isn’t it?

Stock up on business attire

The transitory nature of the U.S. economy since the recession has made it clear that having a job is not a sure thing. Hence, you want to make yourself as employable as possible. This extends into the way you look, so why not use your tax refund to stock up on interview clothing and personal grooming items? Making a good first impression is always a good idea.

Make the money work for you

As tempting as it is to spend your tax refund on something shiny or travel to Aruba, investing it in a savings account, annuities or the stock market. That way, the money can work for you and gain interest.

Sources

Bankrate

Money Crashers

WiseBread

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