Receiving a tax refund is always exciting. After working hard all year, it can be tempting to spend that money on something for yourself, like a little vacation or a cool new tech device. But thinking about your long-term goals will help you get more out of your refund. Put your money to work this year! By investing in your financial future, you’ll be paving the way for your financial freedom. Here are 5 smart ways to make your tax refund pay off for years to come.
Remodel Your Home
Investing in bathroom remodeling upgrades could be a good idea if you’re planning on selling in the future. Focus on upgrades that will offer the biggest return on your investment, like a garage door replacement or kitchen remodel. Before sinking money into home improvements, get in touch with a licensed contractor like West Shore Construction. We offer kitchen and bathroom remodeling, painting, green building upgrades, hurricane protection, and much more!
Continue Your Education
Investing in your continued education is an investment in your career. According to SharpSpring, continuing your education can boost your earning potential! Continuing education also opens the door to better job opportunities, which is great if you’re feeling a little stagnant in your current position. For example, earning an online business degree will enable you to work in exciting fields like healthcare management, accounting, human resources, or marketing. You can find many accredited online schools for business administration with a simple Google search. Just make sure the online school you choose is accredited and offers competitive tuition rates.
Start a Small Business
Earning a business degree might just inspire you to start your own company. And this is another great use for that tax refund! If you don’t have a lot of extra money to spare, stick to business ideas that you can fund with your tax refund alone. Almost any freelance-based service business will work well. CNBC lists several business ideas you can start for under $1,000:
- Tutor
- Professional organizer
- Photographer
- Freelance writer
- Virtual assistant
- Graphic designer
- Social media manager
- Business consultant
Use your tax refund to lay the foundation for your business so you can get up and running without dipping into your savings. You’ll need a basic website, a few digital tools, and the proper permits to operate your business legally. You should have no problem paying these startup costs with your refund.
Invest in the Stock Market
If you’re not looking to remodel your home, make a career change, or start a business, consider investing your tax refund into the stock market. The Balance suggests investing through your Health Savings Account (HSA) or IRA to maximize your benefits and minimize your taxes. You can invest in individual stocks or mutual funds through online investment brokerages to save money on fees and commissions.
Pay Down Your Debt
Besides saving your money for the future, paying down existing debt is another great way to use that tax refund. When you consider the amount of interest you will pay over the course of your loan, paying down a portion—or all of—your debt with your tax refund can save you some serious money. Not only that, but paying off debt will boost your credit score. In turn, your reduced credit score will give you leverage to negotiate lower interest rates on future loans, saving you even more money in the long run!
Remember, your tax refund isn’t bonus money. It’s a reimbursement for overpaying your taxes during the previous work year. Try to think of it as a free loan you made to the government or as savings you’ve accumulated over the year. With that in mind, you might want to put that money towards your long-term goals instead of splurging on a shopping spree!
Are you thinking about spending your tax refund on a home upgrade? Get in touch with West Shore Construction for remodeling projects and hurricane protection. Fill out the contact form on our website to request a quote for your project!
