In 2021, the average taxpayer received nearly $2,800 from the IRS in tax refunds. With this kind of money burning a hole in your pocket, it’s easy to blow it on something you don’t really need, like new clothes or electronics. After all, that’s what people spend their tax refunds on, right? Actually, more than half of Americans plan to make a more responsible choice like putting the money in savings or paying down debt. Check out these ideas if you’re looking for ways to spend your refund wisely.
- Save for a rainy day: If you’re currently living paycheck to paycheck, use your refund to bolster your emergency savings. This way, you’ll have money to draw from if you get a flat tire or have to replace your refrigerator out of the blue.
- Pay off debt: If you have student loans or credit card debt, pay it down with your tax refund. Even if you only have a car payment or mortgage or deal with, you can get ahead on these expenses for a little peace of mind.
- Fund your retirement: What better way to set money aside for retirement than using funds that weren’t part of your paycheck anyway? Thanks to compounding interest, your $2,800 refund (plus future contributions to your retirement plan) can grow into a healthy nest egg.
- Seed a college fund: If you have kids, do them a favor by setting up a 529 plan to help pay for their higher education when they get older. You may even pick up an income tax deduction for your trouble.
- Make home improvements: Have you been putting off a project like replacing your windows or installing a home security system? If so, consider putting your refund toward these important purchases.
- Save for an upcoming expense: Your tax refund is a great way to save up for holiday gifts or your kid’s summer camp next year. This way, these expenses don’t catch you by surprise or eat into your regular budget.
- Improve your career prospects: Fund a professional course, hire a coach, or pursue another form of self-improvement with your tax refund. This could increase your earning potential in the future, making it a wise investment.
- Donate to charity: If your finances are looking pretty good, why not pay it forward? Making a charitable donation is a great way to support causes near and dear to your heart. Plus, you can deduct the donation from next year’s taxes.
Even if you’re expecting a tax refund this year, it may not be enough to cover an emergency expense that crops up. That’s where VIP Title Loans comes in. We get you the money you need fast, with the best title loan interest rates in Texas to help you pay off your loan quickly and easily. Call us at 817-265-2274, fill out our online contact form, or visit one of our five locations in the DFW Metroplex for more information.