Did you know that the average tax refund in this country in 2014 was $2696? To celebrate this average windfall – not to mention celebrating the end of this year’s tax season altogether – we thought we’d come up with some recommendations for what to do with this money. Here is our list of seven great ways to spend your tax refund:
1) Pay down a debt
Have one of those pesky high-interest debts on a credit card purchase or cash advance? Purge the debt once and for all by paying it off!
2) Put the money in a retirement account
Retirement accounts are great places to put your tax refund – especially when they come with employee match contributions. Your 401(k), Roth and/or non-Roth IRAs are great places to reap long-term benefits on a tax refund deposit.
3) Invest in your career
Get a career and resume boost by taking an advanced course or two in your chosen career path. Whatever money you invest for these courses may yield amazing returns as you increase your earning power down the road.
4) Start planning your summer vacation
It’s never too early to start planning a vacation, especially during the summer months, when airline fares and hotel rates are usually at their highest. Begin shopping around now for the best dates and prices for your destination of choice.
5) Consider starting – or increasing – your emergency fund
Most folks just talk about having an emergency fund; here’s your opportunity to create one that will truly allow you to draw upon it when needed. For the record, most financial experts recommend having at least three months of expenses in reserve.
6) Look into life insurance
Even if your employer provides some form of life insurance for your spouse and/or dependents, you should consider supplementing that with an individual plan that takes care of your loved ones.
7) Buy something you will use – and enjoy – on a regular basis
While J.G. Wentworth usually recommends an ultraconservative approach to savings and investment, we would be remiss if we also did not also propose that you buy something with your tax refund that you will use and enjoy on a regular basis. Maybe it’s a low-cost, but highly rated big-screen television, that would give you untold hours of enjoyment; alternatively, perhaps it’s a bicycle or other piece of sports equipment that you might buy for yourself or a loved one that would get both of you out of the house and enjoying the great outdoors together. Whatever the purchase, our only recommendation is that you carefully think through not just how much you want it, but how much you will truly use it.
We hope you’ve enjoyed reading our list of seven ways to use your tax refund, and encourage you to carefully think through any investment or purchase before making it. As always, if you find yourself short of funds after tax season, are currently receiving or scheduled to receive money from future structured settlement or annuity payments, and are interested in learning how to get that money sooner, rather than later, call J.G. Wentworth anytime at 877-227-4713.