What will you be doing with your income tax refund? I came up with 25 ideas for a large income tax refund. I’ve broken it out into different sections to make it easier for you to find something of interest. Here goes:
- Pay off your credit card debt – If you are carrying credit card debt then a large tax refund can be your opportunity to put a dent or eliminate your credit card debt. Pay it off and you save by not paying as much interest charges!
- Pre-pay your mortgage – You can take that refund and pre-pay your home mortgage. This will also save some interest payments over time.
- Pay off your student loans – If you have private student loans, now is a great opportunity to pay some off. Even if they aren’t private loans you can still make some extra payments to help get rid of your loans earlier!
- Pay off your car loan - Pay off all or at least some of your outstanding car loan. Make sure the payment goes toward the principal.
- Contribute to an IRA – Get money into your IRA now so you aren’t waiting until the last minute next tax season.
- Contribute to a 529 plan – Not only are you investing in your children’s college future but many states offer plans with tax advantages.
- Put it into a high-yield savings account – Sock it away and earn better interest than you would n a brick and mortar bank.
- Purchase CD’s – Set up a CD ladder for continued returns.
- Start a small business – It doesn’t take a lot of money to start up a small side business. You could even try your hand at creating a website!
- Build of your emergency savings - If you don’t already have 8-12 months of emergency savings away then now would be a good time to start!
- Invest in stocks – Take a small amount that won’t hurt you if you lose it and learn to invest in stocks. You can open up an inexpensive online brokerage account like Sharebuilder.
- College Course – Register for a college course or technical course. This could be for your own interest or as a way to help advance your career.
- Travel/Vacation – Take the money and run! Ok, maybe not like that but it could be a nice chance to plan out a great vacation with the family!
- Fix up your home – Paint, renovate, upgrade appliances, get new furniture – make your home a nicer place to live in.
- Set up a fun money account – Take the refund and put it into a sub account in ING (or similarly good savings account). Label it fun money. Throughout the year take money out to do things like go to the zoo, amusement park, museum, movies, etc…
- Upgrade your work wardrobe – Replace some of those worn-out threads. It can make you feel better at work as well as look better to get yo noticed.
- Take care of the car – Get your car a tune-up and a full detail cleaning. Taking care of your car will help it last longer and perform better saving you money in possible future repairs.
- Grow a garden – I love our modest garden. It’s so relaxing and satisfying taking care of it. You get an extra bonus if you can grow your own vegetables to eat!
- Donate to charities – Give money/time to those who need it more!
- Eat better – Have you been telling yourself that you would eat better if you could but it’s too expensive to eat more natural and organic? Put the money aside to buy better food for yourself and build up better eating habits.
- Enroll the kids in an after school or weekend program – Sign them up for martial arts, little league, soccer, music, swimming, etc…
- Take up a new hobby – Learn a musical instrument, play chess, learn a language!
- Get together with old friends - Call up some of those old buddies and treat them to a night out to the local pub or to a local sports game.
- Take your spouse out on a date – Hire a sitter and treat your spouse to a night on the town!
- Do something you’ve never done before – Think outside the box and stretch your boundaries.
Of course these are all suggestions. Make sure you think seriously about what you will do with your income tax refund. Be responsible and take care of debts. If you have money left over then consider some of the fun things you can do.
What will you be doing with your income tax refund (if you are getting one)?