personal finances, tax tips — March 29, 2019

6 Financially Fit Ways to Use Your Refund

by Susannah McQuitty

A woman thinking about her financial fitness while sitting in the sunshine

Many taxpayers will be getting deposits in their bank accounts or checks in the mail this season, and the average refund amount is around $3,000. What do you do with that much money all at once—in a way that won’t have you stewing in buyer’s remorse later?

Check out these six ideas for financially fit ways to use your refund!

Start an emergency fund

Rainy day money? Check. If you don’t have any immediate plans for your refund, setting part of it aside for emergencies is a great idea. Life has been in the business of distributing lemons for quite a bit now, after all, so it never hurts to have a plan for when those lemons—ahem—hit the fan.

Donate to a cause

For every passion project there’s a need for good, responsible funding, and these days there’s hundreds of thousands of charitable organizations supporting a mega-variety of worthy causes. Whether you want to support animal shelters, disease research, clean water access, or just an awesome crowdfunding campaign, using your refund is a great way to cast a vote for the type of world you want to live in.

As a bonus, you could even get tax breaks if your contributions go to a qualified charitable organization—which you can read more about here!

Get started with investing

“Investing” is one of those big words that can send people running for the hills, but even investing is becoming more accessible these days. Portals like Robin Hood let you browse and invest in stocks right from your phone so you can start building wealth without the fear of getting too in over your head.

Pay down debt

Student loans, car payments and credit card balances can easily become too comfortable, even while they sneakily steal your financial freedom. If you’re paying down debt, use your refund to lower your balance due even faster. You’ll boost your credit score and reach a debt-free future sooner than ever!

Start a business

While you might not be able to launch a huge business with $3,000, you could get all the necessary equipment to start a neat freelancing side hustle.

Interested in photography? Invest in a good camera and some lighting equipment. Want to be a travel blogger? Get a good laptop, upgrade your phone plan for overseas use, and launch your website. Whatever you plan to do, you can use that refund to build a foundation for success.

Treat yourself!

Wait, how did this make it onto a financially fit spending list? Simple: The key to staying motivated toward healthy money habits is making room to have fun and enjoy the fruits of your hard work. Instead of nickel-and-diming your money away, use your refund for a much-needed break and savor the splurge!

Did we miss anything? How are you planning to spend your refund? Let us know in the comments, and if you haven’t filed your taxes yet, what are you waiting for? File with today and grab that refund ASAP—you’ve got things to do!

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