The dreaded tax season is upon us. According to the Internal Revenue Service, 90 percent of Americans receive some sort of tax refund. Despite whatever amount you get from the tax man, you should think about ways you could use that extra $50, $200 or even $1,000.
Since the economic collapse, Americans and Canadians have used their tax refunds to pay down their credit card debt, put into an emergency fund, deposit it into their savings accounts and even helped pay down their mortgage.
So what should you do with your tax refund? Here are some tips come spring (or whenever you do your taxes) when you receive your tax assessment/refund.
Credit Card Debt
With an estimated $1 trillion in credit card in the United States, if you receive a tax refund, putting it towards any credit card debt is a good thing. Even using a certain percentage of your refund towards your debt is better than nothing and is a step towards the right direction of being debt-free.
If you’re not an avid saver and not the type of person to put away money throughout the year, getting your tax refund and depositing it into your savings is a great thing to do. This way, you can get your hard earned money back and use it for any type of short, medium or long-term goals you may have (plus you get interest, even though it is relatively nothing right now).
As mentioned briefly above, the interest rate on a standard savings account is quite low (both in Canada and the U.S.). To increase the level of your refund, you may want to look into opening a mutual fund account, research foreign currencies or even think about stocks you’re interested in purchasing.
The great fiat currency experiment is crumbling down. You may want to start thinking about protecting your hard earned money. Start looking into converting your dollars in gold, silver, copper and other precious metals. It could also be converted into other tangible items.
We live in tough economic times. The cost of living is skyrocketing, wages have remained flat and the value of our money has eroded. It’s understandable that some of us are behind in bills. Utilizing your tax refund to catch up on your phone, Internet, cable or other bills is beneficial.
After a hard year of working 9 a.m. to 5 p.m. (or 9 p.m. to 5 a.m.), you may want to consider using some of your refund to purchase something nice to reward yourself. Maybe you shouldn’t use 100 percent of your refund, but one-third could do the trick.