Satisfying Ways To Spend Your Tax Refund

It is tax refund season! This is an exciting time for many due to receiving a tax refund. I mean who doesn’t love extra money in hand? But how should you spend that money? Bills, savings, shopping spree, vacation?

There is no right way or wrong way to spend your tax refund. However, some choices are smarter choices in order to set yourself up for success later in the year.

CATCHING UP ON BILLS

I know this is a boring choice, but sometimes this is much needed. Especially, if the year has been financially difficult for you. Getting all your bills current caught up will relieve a great amount of stress and prevent any collections or further negative financial actions. Getting your bills caught up can feel like a fresh start which can provide you with great mental benefits.

Paying ahead on your bills can also be a good idea to alleviate future stresses. This would be a great idea if you are expecting future financial difficulties. This option also relieves a great amount of stress and prevents you from getting behind in the future. I like to think of it as being able to breathe easy!

Being a single mom, I resorted to both of these options many times. It definitely helped and overall was a good choice.

SAVINGS

Another option is to put the refund into your savings account. Again, this may be a boring choice, but having a little to fall back on is not a bad idea. In a period where most people are living paycheck to paycheck, having a savings account can be hard to obtain. This option is a good choice if you have no outstanding bills or anything that needs attention. Setting a cushion aside for those “just in case” moments can prove to be very beneficial.

This would also be a good choice if you are saving for something bigger, like a down payment for a house. Trying to save for a big expense is difficult if you are living paycheck to paycheck. Therefore, it is a good idea to put away any extra money you receive.

SHOPPING SPREE

Now this is the fun, not as responsible choice. It can seem like a very fun idea to use all that extra money to go out to eat, buy all the things you’ve been wanting but holding back on or maybe a fun weekend trip. If nothing needs your financial attention then do it!! Have fun! After all it is your hard earned money.

One year I had no debts and owed no money to anyone. I planned a Disneyland vacation for my two kids and myself. We had so much fun and I do not feel guilty for not saving the money. We created so many memories that can never be taken away. I also felt proud of myself for being able to stay on top of all of my finances to where I could freely spend my tax refund on a vacation my kids will never forget. We still talk about how much fun we had!

Another year I used my tax refund to buy a car. I hear a lot of people talk about doing this with their tax money. This is a more responsible choice because it will help you in the long run.

There was also another year where I used my tax money to furnish my whole house. It was the first time I had a home of my own and all of my previous belongings had been from my prior relationship. Since I was on a new journey in life I felt I needed stuff that was just mine. I felt empowered by being able to own all my own things. Although this was more frivolous spending I still did not regret using my money this way.

A LITTLE BIT OF EVERYTHING

Depending on how much you get back perhaps the smart decision is do a little bit of all of the above. Pay off any outstanding debts, pay ahead any future debts, put a little in savings and buy yourself a couple of things you have really wanted and/or needed.

This is my normal go to anytime I get extra amounts of money. I like the feeling of setting myself up for success by paying off debts or paying ahead or having a little in savings. But I also like being able to enjoy those occasions that I get to buy things I’ve been wanting.

I make it a habit of writing out my monies owed both monthly and payoff amounts. So when I get my refund I come up with several different options on the best way to split my money so I can divvy my funds in the best way possible.

At the end of the day your refund should be spent in the way the makes the best sense to you and your situation. Just make sure to look at all possible outcomes of any way you choose to spend it to make sure it is the best choice for you in the long run as well.

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