Smart Ways to Spend Your Tax Refund

tax-refundReceiving a tax refund does not give you the license to go on a shopping spree and purchase everything you see on the mall. Yes, you are entitled to that money and you are allowed to have fun with it, but not too much fun. In fact, before you withdraw that refunded cash, or even open your wallet, you have to think hard. Are you free from debt? Do you even have insurance? If you answered no to both, or even one of them, then haul yourself back in the house and think of how you can spend your money wisely.

1. Banish or at Least Reduce Your Debt

That degree you took is not free. In fact, it left you with a large amount of student loan that you have to pay off. If this is the case then it is definitely a no brainer to spend your refund by paying it. The same goes for the house, car, or any other loan that you took. Remember, interest rates goes higher the moment you fail to pay the agreed amount, and you do not want t lose your properties and vehicles, let alone be homeless or bankrupt because of it.

2. Insure Yourself or the Whole Gang

Even Forrest Gump knows that there are things in life that you cannot predict. Knowing that this is the situation, you better be prepared as early as now, and that tax refund in your account is the solution to your problems. You can simply use it by purchasing insurance for you and your family. At least, you know that whatever happens with you, your children will grow up comfortably with food on the table and clothes on their backs.

3. Go for Your Needs

Needs are different from wants. The latter is just your imagination waiting to happen and does not damage your life in any way if you do not obtain it. Aside from love, belonging, and self-actualization, the basic needs include food, shelter, and safety. Financial security falls under the last one so it is important to save your refund, or invest it on stocks or business.

There are a lot of ways to spend your refund wisely. You just have to know what you need now and in the future, and take care of it. After everything is said and done, only then can you purchase those new clothes that you have been yearning for.

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