It’s that time of year again! You’ve compiled all tax documentation to tackle the yearly adulting responsibility to file your taxes, and double checked all of your itemized deductions and any other write offs to fully maximize your return. The confirmation email has finally been sent, and now you’re patiently waiting for the deposit in hopes that you’ll receive a hefty lump sum. As exciting as it may be to think of all the splurges that can take place with your refund, consider a few things that you can do to better position yourself financially.
Make payments on your debts
This is one of the best times to compile and assess what’s currently owed. Once you have your full list, rank them by listing the least expensive debts first. Tackle the smaller, lingering debts you’ve been meaning to pay off. Reach out to creditors and see if they are willing to lower the balance of outstanding debts since you’re in a position to make a full payment. Closed mouths don’t get fed…right?
Handle any major household needs
Is there something around the house that needs to be repaired or replaced completely? This is the perfect time to receive some quotes. Seek out the best pricing and decide what makes the most sense financially for you. Avoid putting it off any longer; tackle it while you have the extra discretionary funds.
Put away at least 10% of your return
In the midst of paying off others, don’t forget to pay yourself. Remember it’s best to have at least three to six months of living expenses stored away. Take this time to beef up your overall balance, this will give you the momentum to press forward with your savings.
Build (or start) your emergency fund
Don’t be intimidated! If your emergency funds have been depleted from unforeseen circumstances in 2017, use your tax return to make a fresh start. Being intentional about contributing to this fund will drastically reduce your financial stress. The best way to handle life’s surprises is to remain prepared.
Invest in yourself
Note I didn’t mention buying that designer handbag or shoes you’ve been eyeing. While we all love new material items, take this time to purchase a book, course or something that will provide a return for you. Interested in starting a business or getting a certification? Make sure your money is working for you-instead of you working for it.
Here’s a helpful resource to help you maximize every dollar of your refund.
Let us know how you plan to use your extra funds.