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Five Ways to Spend Your Tax Refund

Blocks spelling Tax Refund

The average tax refund in 2016 was $3,050¹.

If you’re ahead of the April 17 tax deadline, the hard part of filing is over. Now it’s time to decide what you want to do with your tax refund.

Here are a few options to consider:

Pay down debt.

Move closer to financial freedom. Whether you are paying down credit card debt or making an extra student loan payment, paying down debt is always a good idea. Utilize our debt calculator to figure out how that extra payment will impact your pay-off timeline.

Home repairs/updates.

If you have been wanting to invest in your home now is a great time to do so. Use your tax return to put some equity back into your home by doing that bathroom update or putting in those new hardwood floors. If you already have part of your return allocated somewhere else, use the equity in your home to make the updates through a home equity line of credit.

Fund your future.

Use your tax refund to fund your future! Growing your savings or investment portfolio helps bring you closer to financial freedom.

  1. Invest in an IRA. Click here to see if an IRA is right for you.
  2. Grow your investment portfolio.
  3. Grow your savings account. Save for life’s unexpected, or expected expenses.

Take a vacation.

Treat yourself! Use your tax refund to fund your next vacation. Using this money to pay for as much upfront costs as possible will help curb costs during your vacation. This will make it easier to avoid vacation debt and the additional interest charges that accompany it.

Invest in yourself.

Use this money to further your education or career. Go back to school, take a class you’ve been thinking about or buy that book you’ve wanted for months! Investing in you is a great way to maximize the value of your tax return.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategy, if any, may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. The tax information provided is not intended to be a substitute for specific individualized tax planning advice. We suggest that you consult with a qualified tax advisor.