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You Definitely Don't Want to Do This with Your Tax Refund

Published: April 23, 2018 | Updated: November 10, 2020

You got a tax refund this year! Congratulations! You worked hard for that money and now it’s your chance to spend it however you want, right? Maybe hit the casino? Or buy that jumbo 3-D TV?



Stop right there!



While you’re probably too smart to throw your money away when at a casino, even splurging on a big screen TV is probably a bad idea. Sure huge TVs are awesome. But if you already have a TV that works just fine and more important things to do with your money, don’t waste it. A car that needs to be fixed, credit card debt, and student loans need to come before a luxury you don’t need. Show some good judgment now and you’ll be more financially set later.


Instead of blowing your tax refund, here are 7 better ways to put that money to good use:


Address Immediate Needs

Is your car unreliable? Does it need parts or service? Do your kids need new clothes or shoes for summer? Put your refund toward these needs. There may be things you want that seem more fun, but those should come after the needs that help you comfortably get from day to day. Make some good financial choices and you will feel responsible and relieved.


Pay Down Your Debt

Make debt reduction a priority. You probably had good reasons to take out loans or use your credit card. Maybe you had to finance your education. Or maybe some unexpected expenses popped up and you had to rely on credit.  And maybe that debt isn’t paid off yet because you just can’t afford to. This is your chance to get ahead! Put that refund toward paying down your debt and you could save yourself a lot of money in interest over the long run. Not to mention that if you fall behind on payments, you could damage your credit rating. If you fail to pay your student loans, you may even have your wages garnished.



Invest In Yourself

Investing in yourself — and your future — is always a smart choice. Is there a step you’ve wanted to take to further your education or advance your career? Or maybe there’s a program you’ve been eyeing where you could learn a new skill? Now might be the time to make it happen! Put that refund toward your future.




Grow Your Money


If you want to expand your money in a safe, smart way, head to the bank and talk to someone who can help you with investments. You may have options to put money in a savings account, CD, or bonds. Doing so will keep that refund away from everyday expenses and earn you interest.



Start a Rainy Day Fund


If you find yourself scraping for cash when an unexpected cost comes up, it might help you to set some tax refund money aside for those times. Even if it’s a few hundred dollars, you’ll be relieved to have it when you need it and to not have to break out the credit card instead.



Plan for Retirement


It may seem far off now, but retirement age will be here before you know it. The sooner you can plan for it, the better off you’ll be when it comes. Become financially literate and talk with  your employer to learn what kind of retirement savings accounts might be available for your situation and goals. You can use your refund to kick off the account and opt to have a certain amount of money come out of your paycheck and go directly into your retirement account. That way you continue to save without having to think about or plan for it every time you get paid.



Treat Yourself




This doesn’t mean splurging on extravagant things that you don’t need — like that giant TV —but it’s OK to have some fun with some of your refund! Maybe get yourself a manicure or take the kids to a movie. Taking care of yourself and spending time with the people who matter most to you are just as important to your long-term success as wisely investing your money.


If you’re ready to invest in yourself with an education, contact Charter College today. You can learn about our programs in business, healthcare, information technology, and some trades by filling out the form now.