We all get a little excited around this time of year when we file our taxes and see how much money we get back from the IRS. While it may be tempting to splurge on a new TV or new rims on our cars, there are much smarter ways to spend the cash. Below, we've put together a comprehensive list.
- Start a savings account. It's imperative to have emergency cash on hand if something should arise. Start with your refund, then add a little money from each paycheck. Soon enough you'll have a safety net to protect your family.
- Take care of yourself. Do you have holes in your shoes but have been putting off getting a new pair? Or maybe there's a procedure you need to get done for health reasons? Now's the time to take care of yourself.
- Invest in a tax-sheltered account, such as a Roth IRA. If you haven't thought much about retirement, you're likely behind where you should be at this point. A Roth IRA is an after-tax income account that earns interest over time. Your $100 contribution now could turn into $1,000 after time.
- Donate some to charity. It feels good to give back to your community when you can, and your contributions are tax deductible, too. We have a list of charities on our website to help.
- Seed your children's college fund. This doesn't just apply to parents, but grandparents, too. College is incredibly expensive, and every bit helps for the little baccalaureate- to-be.
How are you planning to spend your refund? Tell us in the comments below.