If you’re expecting a refund on your personal taxes, now might be the perfect time to start investing in your future. After all, the average taxpayer gets a little over $3,000 back from the IRS, an amount that can contribute to your long-term financial stability if it’s invested wisely. Below are a few of the smartest ways to spend your tax refund.

4 Ways to Invest Your Personal Tax Refund

1. Pay Off Your Credit Cards

Most credit cards have extremely high interest rates, sometimes topping out at 20% or more. If you’re just making the minimum payment every month, you’ll eventually be paying back more than twice what you originally borrowed. Using your tax refund to pay down consumer debt will not only lower your monthly credit card bills, but it might also save you thousands of dollars in the long run.

2. Start an Emergency Fund

If your car unexpectedly broke down, would you be able to get it fixed without taking on more debt? If you had a medical emergency, would you be able to cover the deductible? Saving your personal tax refund for a rainy day will give you a cushion to absorb the financial shock of unexpected expenses while providing priceless peace of mind.

3. Invest in the Market

In general, the stock market offers higher returns than bonds, CDs, or even high-interest savings accounts. If you have the risk tolerance and don’t plan to retire soon, your tax refund can provide the foundation for a lucrative long-term investment.

4. Start a College Fund

If your own retirement is looking fairly secure, consider investing in your children’s future instead. Along with the potential for serious growth, a 529 college savings account offers considerable tax advantages both for you and your kids.

Whether you’re a small business owner or an individual taxpayer, Clark W. Terrell CPA has the expertise to help you make the most out of your money. As the leading accountant in Crossett, Hamburg, and Monticello, they provide a broad array of personal tax services to clients throughout southeastern Arkansas. Follow their Facebook for more tips and advice, and visit their website or call (870) 364-5006 now for an appointment today.