Tax time is quickly approaching, and with that comes the anticipation of that long-awaited refund! It is a great feeling to receive that check from the government, and many people choose to treat themselves to something. However, so many of us tend to use that money for "wants" rather than "needs". This year, ask yourself if that is truly the wisest choice. Realistically, the refund that we receive can be put to better use. Before you head to your favorite store and spend a large amount of money on many items that aren't really a necessity, take the time to think about how you could put your tax return to work for you.
Pay Off Your Debt
How good would it feel to be debt-free, or at least have your debt paid down significantly? This option works for you in more ways than one. In addition to paying what you owe, using your tax return towards debt will help you save money on interest throughout the rest of the year. This translates to more money in your pocket, money that could possibly be used to pay your debt down even further! The end result is increased savings each month.
Take an Educational Course
Have you always dreamed of pursuing your educational endeavors, but a lack of financial resources has been holding you back? Perhaps this year, you should use your tax return to pay for a class that you've always wanted to take. Perhaps you've always been interested in something such as day trading. What better way to invest your money than in yourself and your education? It will certainly pay off!
Put the Money Towards Retirement
Many people often say how they wish they had more money in their retirement fund. This year, consider using your tax money to fund a Roth IRA. A Roth IRA is an excellent resource to have alongside your 401(k). While this is something you may not have thought about doing previously, you'll thank yourself in the future.
Earn Interest in a Savings Account
Having a great savings account gives you financial peace of mind. Sit back over the course of the next year and watch your savings grow. This is probably one of the smartest and most satisfying things you can do.
Make Home Improvements
This is a gift to yourself and your family that will keep on giving. Have you noticed that you have faulty windows, but haven't gotten around to improving them yet? Maybe you are thinking of selling the house within the next few years, but the kitchen needs some major updating. By using the money to make home improvements, you can do things such as save money on energy bills or add value to your home. Consider using the tax return money this year for things such as new flooring, a fresh coat of paint throughout the home, or a much-needed bathroom remodel. You'll be glad you did!
So many of us get excited about the "windfall" that we receive each year, and we end up spending it on things that we do not actually need. While it is great - and also necessary - to treat yourself to something every now and then, learn to separate your needs from your wants, and have your money reward you as a result. With many smart ways to use the additional money you get back each year, remember that "wants" are short term, while "needs" pay off.
Lincoln Savings Bank is fully dedicated to helping you reach all of your financial goals. For more information, reach out to one of our locations.
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