5 Smart Things You Can Do With Your Tax Refund

  1. Save it –

According to a Bankrate survey – 57% of Americans can’t cover a $500 emergency. Another 21 percent said they would rely on a credit card, while 20 percent said they’d cut back on other expenses. Another 11 percent said they’d turn to family or friends for the money.

 

When the Federal Reserve polled 5600 people and asked what types of emergency expenses Americans had actually faced in the last year, more than one out of five cited a major unexpected medical expense. The average expense: $2,782.

 

Start a health savings account – If you don’t have one, you must research this for your family.  In order to have a HSA, you must be enrolled in a high-deductible insurance plan. The intention of the HSA is for you to save for your medical expenses tax free instead of paying higher premiums. The money you save in your HSA will be used to meet your high deductible.

 

 

  1. Pay off debt –

According to Nerd Wallet, the overall U.S. household debt has grown 11% in the past decade. They shared some other interesting stats:

 

Average American Household Debt: $5,700.

Average for balance-carrying households: $16,048

38.1% of all households carry some sort of credit card debt.

 

(Click to see the larger image on Nerdwallet.com)

 

Households with the lowest net worth (zero or negative) hold an average of $10,308 in credit card debt. Your net worth is: All assets – all liabilities. If you have a negative net worth that means your liabilities (debts) are greater than your assets, or you have no assets.

 

 

  1. Invest in your retirement fund –

Start a Roth IRA – A Roth IRA is a retirement fund where you have paid taxes on the money going into your account, and the earnings grow tax free. Thou shalt get old. Saving for your retirement will help you be able to work IF you want to versus working because you HAVE to.

 

  1. Invest in business –

Save your money to start your own business. You can deduct startup expenses from your taxes in the future. Research your proposed business. Do your homework. Save some money, because you’ll need it.

 

  1. Invest in Mutual funds or stocks –

FIRST… do your homework. Don’t just go off all willy nilly. Educate yourself. Talk to mutual fund companies, read books, listen to podcasts. The information is out there. You just have to go get it.

 

Tax Time Ballers are stuck in a cycle. They get these huge tax refunds, and go buy all kinds of stuff. This is a destructive habit. Many have gotten themselves to a point where they are dependent on this tax refund. Understand that a tax refund is YOUR MONEY. The government is giving you’re your money back. Instead of blowing it this year, let’s make some smart decisions that will put money in your pocket and secure your future!

 

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