May 22, 2022 3 min read
We probably have passed the seasonal dread (for all you standard filers) when it comes to tax season, but it’s time to get excited and have some fun! “But how?” you may ask– Well if you are expecting a refund, it’s now a great time to spend or save some of that paper!
So, what should you spend your money on? Do you take the extra cash and go on a trip? Or do you buy something you’ve been waiting to get? Or do you choose the low-on-the-fun route butheavy-on-the-responsibilityfactor– such as paying off a credit card? So many options, yet we have limited refund money. Here are our top 5 tips for tax season spending.
Our 5 ways to Effectively Help you Use your Tax Refund AND Improve your Financial Game
Do you own a home? Congrats! Want to pay it off even faster? Cool! Here’s how: Take your tax refund and make one extra mortgage payment to the principal balance of your home loan.
I.E. if your mortgage payment (principal and interest you owe the bank), is usually $2,000 a month. Make one extra payment of $2,000. Remember to apply for this payment as a “principal payment” so it tackles the total loan balance. Do this yearly and cut 3-8 years off your total mortgage term.
Making one extra payment, it will reduce the total mortgage you owe the banks and the total interest you owe for the life of the loan. Big win.
Got any adventurers out there? Does anyone with that wanderlust fever? Awesome! You can use some (or all) of your tax refund to save for your next big adventure. This will require a plan of attack for your trip! Budget out where you want to go and the estimated cost, then choose how much of your tax return you want to put into savings so you can make it happen.
Your budget + your tax refund = a game plan for your next adventure.
We all know that looming feeling when you go to sleep at night…it’s your credit card debt…and it’s not going anywhere without your help! Using your tax refund to help pay down your high-interest debt can be a huge stress reliever and put you in a better financial position.
This may not sound as sexy as vaca, but it’s a huge win! There’s no peace like the peace of mind.
Be strategic! If you can pay off one card or more–great! Or even simply reduce the current balance on a credit card. Every opportunity to pay down debt and reduce your interest charges is a win.
While improving your financial life, remember that it is okay to treat yourself to something you’ve wanted to do and/or purchase. Reward and recovery are super important parts of a thriving, successful, and balanced life. You can create space for celebration and relaxation–just do it responsibly. Money, mind, and body.
Like what you heard? Grab our wealth-building mini-course in the description and get started improving your money game today using your tax refund the Financial Footwork way.
Remember. Life is short! It’s all about finding the balance between what you can do to improve your finances while enjoying your life in the process. We hope this helped! Rock on.