Five Tips for Your Tax Refund
Put That Money to Good Use
February 7, 2014 by Mark Dye
Using your tax refund to take the family on vacation, instead of using a credit card, can save you money in the long run.
Last year’s blog on what to do with a tax refund provided five good options of what to do with that money. This year we’re back with five more things to consider if getting you're money back from Uncle Sam.
Save for college
Using a tax refund for continuing education can get you a good start on those costs. Sure, it might not cover the entire tuition, but can help with things like books. If your children are young, a 529 college savings plan might be an option to consider. There are many out there, each with different rules and qualifications, so do your research first. One thing each plan offers is a way for you (and even family and friends) to save long term for your child’s future education.
If you’re like most folks, you probably pay your car insurance every three or six months, or maybe even monthly. Some companies offer discounts if you pay the year’s premiums all upfront, meaning you could save a few hundred dollars by getting it out of the way.
You might also consider paying your personal property taxes on your vehicle. Sure, using a tax refund to pay taxes might seem ironic (and maybe it is just a bit) but it’s also a great way to have it paid without worry.
Taking some much needed R&R is a great way to connect with the family, just your spouse, or even yourself. So whether it’s some high-quality beach time, a trip to an amusement park, or even going to see family and friends far away, having it covered in cash will make it less stressful.
We’ve all been there: it’s the last minute and you’re out scrambling to buy a birthday present, or fighting crowds on Christmas Eve to finish things up. Well, why not do a bit of shopping early using that tax refund? While kids might be a tad more difficult due to wanting what’s hot or trendy, odds are you have friends and family with pretty predictable tastes. Make a list of those and get that shopping out of the way now so you can wow them later.
Adjust your withholding
If you’re getting a huge refund, consider adjusting your withholdings so it’s not so much. After all, if you’re giving that money to the IRS, it means it’s not working for you that entire time. Try to keep it balanced so that you won’t owe a bunch, but also aren’t essentially lending away your money to the government interest free.