So you’re getting a tax refund this year? Nice one. According to USA Today, about three out of four taxpayers will get one too – and the average is $2,500. Not too shabby. Don’t blow it. Spent the right way, that $2,500 could be a really solid investment. So here’s how to spend it with guidance from the experts at Money Magazine:
- Priority number one: Downsize your debt. The best, safest investment you can make is to zero out a credit card or two. Think of it this way – if you pay off a card with $2,500 balance, instead of just making the minimum payments, you’ve just saved nearly $900.
- The next priority for your tax refund: Create an emergency fund. I know it’s tempting to spend that money – but $2,500 is a good chunk to help in an emergency. Like if your car breaks down, or you have unexpected medical bills. Don’t just put it in your savings account. Go to Bankrate.com and chose an online account that pays 5% or more in interest.
- Here’s a great investment for your tax refund: Invest in yourself! Keeping yourself healthy is actually your most important investment! So buy a series of personal training sessions – or get that dental work you’ve been putting off for seven years. If you pay up front in cash, not only will you likely get a discount on both services, you’re more likely to stick with it because you won’t want to waste the money.
- Upgrade your digs. In this down housing market, making improvements is one of the best ways to increase your home’s resale value. So with $2,500 in your pocket and some elbow grease, work on the bathroom and the kitchen. Repaint, upgrade the countertops, buy a new sink, light fixtures – or do a landscaping project outside. In a buyer’s market like this one, if there are 100 similar houses on the market, the one that’ll sell the fastest is the one in the best condition. That one should be yours.