Share:

Unless your compensation package includes a hefty bonus, your tax refund might be the biggest windfall you get all year. Many people choose to use this money for luxury purchases or a vacation, but it can also be leveraged to make positive, long-term changes in your life. Here are a few pieces of financial advice for using your tax return to build a stronger, more financially stable future and attitude.

4 Ways to Invest Your Tax Refund

1. Pay Down Debt

If you can only afford to make the minimum payments on your credit card and other debt, you could end up paying double what you actually owe. Using your tax refund to pay off debts can save you hundreds or even thousands of dollars in interest payments, freeing up money you can use to keep working toward your goals or splurge on a new TV later.

2. Invest in New Skills

financial adviceStarting a college program, getting certifications, or taking online courses to build your professional skills can open doors for the rest of your life. Investing in your career is always a wise investment, helping you reach your full potential and make every aspect of your life more meaningful.

3. Build a Medical Fund & Living Fund

A single medical emergency or unexpected car repair can push your budget to the breaking point, forcing you into debt. Having a nest egg in the bank will give you the resources to handle these situations without compromising your financial future.

Many financial advice experts recommend saving up enough to cover your living expenses for six months. To be safe, you should have an Emergency Fund and a Living Fund. The former should be for covering unexpected medical costs, while the latter should be dedicated to helping in life-altering situations like losing a job. 

Finally, to avoid having to cover auto emergency costs, such as fixing an overheated engine, allocate part of your monthly budget toward vehicle maintenance. For example, have a professional check the engine, headlights, turn signals, and fluid levels at least once a year. 

4. Dream Purchase Fund 

If you have emergency funds and you’re debt-free, put some money toward a dream purchase, such as a new car or home. To help your investment grow, place the cash in a high-paying savings account. Generally, online-only banks offer the best interest rates. However, consider fees and other costs before opening an account. 

 

If you’re treading water and unsure how to start building the future you’ve always dreamed of, LeadLife, Inc. offers the effective financial advice and compassionate coaching you need. Life coach Shiela Wood is dedicated to helping people throughout Jupiter and Florida’s East Coast achieve their dreams with a diverse range of workshops, classes, and personal counseling sessions. Visit her website to learn more about life-changing courses or book a free one-on-one consultation today. You can also email info@leadlifeinc.com. 

tracking