Having an extra $3k in your pocket can make you feel rich for the moment, but it can also lead to some serious money blunders and unwise spending. Before your tempted to have fun and blow through it super quick, here are 6 wise things you can do with your tax refund lump of cash…
6 Wise Things To Do With Your Tax Refund
People usually add this last in their lists, but it’s important for a Christian to give their FIRST-fruits. It’s always the very first thing I do in my income personally. Any money I get in, we decide as a family how much of it can be given to God. Why? Because really, it’s His money anyway. He’s just letting us ‘borrow’ it, and like a good steward, I want to be found faithful.
2) Don’t get a tax refund
Claim more on your household exemptions and get the money throughout the year added to your paychecks instead of letting Uncle Sam collect all that interest that YOU could be earning!
3) Pay off debt
Credit cards especially, small loans, car loans, any type of loans you owe that you can pay off. You’ll save interest in the long run by paying these debts off. Remember, a borrower is slave to the lender.
4) Stash away $1k in an emergency savings
Have trouble not being able to keep it in the bank? Consider setting up a TWO signature savings account at your local credit union. You get the idea, It takes the both of you to withdraw! Perfect way to hold each other accountable.
5) Save to buy a house
If you already have $1k in your savings and your debts are paid off, saving the money and earning interest is your best choice. You can open up Certificate of Deposits (CD’s) at your local credit unions to earn even more interest!
6) Save for college
Or your kids a car. Eventually, they are going to need that money, and wouldn’t it be nice for them to already have it available? I’m not saying don’t make them work for it. That’s totally fine. I paid my way through college by winning essay contests (shocker, eh?) 🙂 and getting financial aid. I never got into any debt what-so-ever in college. Of course, that was many years ago, and times have changed. For that reason, they will need extra funds in that time of their life. Again, do a two signature account if you have trouble keeping it in the bank.
Did I miss any ideas? Would Dave Ramsey be proud? What else are smart and wise things to do with your tax refund?