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 You may be relieved to hear the tax accountant tell you that not only do you not owe in to taxes but that you are, in fact, getting a refund. The word refund means basically that you lent the government money and they must give it back to you sans interest. There are several things to consider as you contemplate show and where you plan on spending your money. 

  1. If you consistently get back a large refund each year, speak with your payroll coordinator or accountant about adjusting your tax withholding on your paychecks. Even a small amount of money added back into each paycheck can make a substantial difference in your income, especially if you commission the additional money to go into an interest-bearing account each payday. Since you where already surviving without the money, you will not miss when you invest it elsewhere.
  2. Do not spend any of your refund impulsively. Consider your overall situation carefully and decide where the money would be used for the best interest of the whole family.
  3. Pay off credit cards. It will help to reduce your debt and will also help you avoid acquiring new debt with interest payments and other monthly fees. Choose to pay off the smallest debt first and you can free up more of your monthly income. You could also choose to pay down the card that has the highest interest rate to get ahead of the ga
  4. Establish or contribute to an emergency fund. Most people find that 3-6 months worth of income is the goal to achieve a good amount of money for an adequate emergency fund
  5. Invest in long-term, high rate investments, including mutual funds, stocks, and even real estate. If you are not knowledgeable about investments, schedule an appointment with a professional who could steer you in the right direction.
  6. Use the money for things you normally can not afford that will improve your assets, including fixing your car, doing home improvements or renovations, or even furthering your education.
  7. Spend the money on luxuries you couldn’t otherwise afford. Consider your options. When was the last time you had a family vacation, bought new furniture, or just had some extra money to spend on whatever you wanted? The usual, everyday stresses of life can get to you all year long. Having a little fun can be a perfectly reasonable option as long as you stay within your means.

However you decide to spend the money is ultimately your decision. Take the time to consider each one of your options and use it to your best advantage.



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