This week we have a guest blogger, John Gower, from NerdWallet, with some fun, budget-friendly ways to use your tax return. Read on for his ideas; and be sure to check out NerdWallet for other financial tips.
For those lucky taxpayers who expect to receive a refund check from the government this year, the blessing of a tax return could turn out to be a curse in disguise. Will you diligently save this bonus or will temptation get the better of you in favor of a new TV or spring break vacation?
There are plenty of ways to responsibly use your tax return, and not all have to be unexciting or particularly damaging to your budget. Here are 4 ways you could put the extra cash to good use.
Make a down payment for that much-needed car
With summer just around the corner, you may be starting to consider a new vehicle – maybe even your first! Luckily, Northwest Georgia Credit Union can help to finance your purchase with an auto loan. However, the more you can afford to put down in cash on the purchase, the less you’ll end up owing. So instead of blowing your hard-earned money on unnecessary purchases, you could use it for a better car to get you where you need to go.
Invest in yourself – take a class
Heading to a classroom may sound like the last thing you want to do this spring, but it doesn’t have to be History 101 you’re attending. Many community colleges offer affordable courses on subjects from computer programming to cooking, so whatever your interest, there’s bound to be a class to try.
Have you always wanted to learn to move like Justin Timberlake? Take a dance class. Have you dreamed of the spotlight? Try acting or improve class. The possibilities are endless and the results will be a new skill to add to the resume!
Pay off your debt
Let’s be honest, this one may not sound like the most “fun” activity in the world, but consider the alternative: ever-growing credit card bills can really begin to crush your spirit. If a tax return can help to wipe out a good chunk of your debt, it’s certain that you’ll feel a major weight off your shoulders. Then you can focus on the fun stuff.
One way to spend excess cash is to use it to help others in need. You could make a small donation to your favorite charity (every little bit counts) to give your karma a boost. Your gift may even be tax deductible for next year!
If giving to charity isn’t quite your thing, you could check out organizations like Kiva, which allow anyone to make a small loan to people in developing countries. You get to choose those you lend to based on their online profiles, which include who they are and what they’ll use the money for. The best part is that the amount you give will likely be repaid over the following few months (not guaranteed, but repayment rate is 99%), and you can lend the money all over again!
Whatever you do, don’t forget to put some cash away for a rainy day
Americans as a whole may not be saving a whole lot of their incomes, as evidenced by the personal saving rate in the U.S. So make sure you do your part to turn that trend around and stash at least some of your tax return in a savings account. This will ensure that you aren’t left high and dry if an unexpected emergency happens to arise.
John Gower is a senior analyst for NerdWallet, a personal finance website dedicated to helping consumers make smart financial decisions.