Smart Things to do with Your Tax Refund

Smart Things to do with Your Tax Refund

1.       Start or increase your emergency fund.

It is important for every family or single person to have an emergency fund for life’s special challenges. This fund can be the difference between feast and famine. Emergency funds help us to pay for car repairs, the long distance phone bill (Junior met a girl online in another town and didn’t realize it was long distance to call her), sick days that you don’t get paid for but the rent or mortgage is still due. It doesn’t need to be fancy or elaborate. You can save silver dollars or half dollars or $2.00 bills in a shoebox. Just have that additional security on hand.

2.       Buy a freezer and stock it.

Having a freezer at home that will allow you to stockpile foods (take advantage of sales). If you have a local butcher shop (or live in the a place with ranches), you can get a great buy on a half a cow, which is enough meat to sustain a family of four for up to a year (unless you have a big teenager playing football and eating nonstop). We think of a freezer as a big purchase, but it can be a great asset as well.

3.       Take care of the things you never had money for this year.

Invest in those things that you need. Get Lasik surgery; buy the new sink faucet so you save water this coming year; get the work done on the car so it doesn’t eat oil any longer. Think about how you can avoid being nickel and dimed to death in 2012 by the little things that wear out or are worn.

4.       Pay off a high interest credit card.

This is a wonderful idea if you can do it. That means that you pay off the card and SHRED IT! Unfortunately, many people pay off the same card year, but he card is then maxed out before June. If you pay off the card, keep it at a zero balance. Remember that if you have the “Emergency Fund” you don’t really need the credit card.

5.       Contribute to a Roth IRA (after tax dollars)

Look into a Roth IRA for retirement savings. Roth IRAs are more flexible than Pre-tax IRAs and have been used as a down payment when purchasing a new home in the past. Check with your Financial Advisors for more information on the benefits of a Roth IRA.

6.       Invest in YOU.

Do you want to take a class or explore your creative side? DO IT!

The main hindrance to success is fear of the unknown.