For 2014 the average tax refund was roughly $3000, let’s just say you fell into that amount reported. You now have an extra three-grand to spend on whatever you decide. Sure, you can go and blow it on some monetary possessions you don’t need, or you can decide to spend it on something that makes marginally a bit more sense. I am not here to tell you how to spend your hard earned money. If you want to make it rain in the club or buy the Apple Watch, that’s cool. But, if you want to be smart about your tax refund, here are a few suggestions.
During our 30 Day Primer we mentioned a few ways you can start investing easily. Now that you have some extra dough in your pocket, why not move forward with the idea? You don’t have to invest your entire refund check into the stock market, but maybe a couple hundred dollars would be a good amount to get you going. You can seek a Certified Financial Planner to suggest some stocks that may be great for you, or you can go the app route in order to get you started.
Beef up your “Just in case” fund.
If you are tired of living check to check, then use this tax refund as your “just in case” fund. This is pretty straight forward, living paycheck to paycheck isn’t fun and you shouldn’t want to settle for that type of life. Use this refund as a financial emergency fund towards life’s obstacles. “A three-month emergency reserve of all your fixed expenses — mortgage, utilities, food — is ideal,” says Jessica Cecere, president of Consumer Credit Counseling Service of Palm Beach County and Treasure Coast in West Palm Beach, Fla. “But even if you only put $1,000 into a savings account, you’ll be better off than a lot of people.”*
Pay Off a Debt
This will be something you will hear over and over, and it is for good reason. Why accrue more debt when you can just pay it off? Look at your debt and decide which one you would like to pay off or reduce. Paying of a debt is always better than reducing one of course, but you shouldn’t just throw away your whole return on debt. Best advice depending on your return amount split it in half. Half on your debt and half for that “just in case” fund we mentioned above.
Okay, we know we spoke about being smart about your tax return, but let’s be realistic. You are going to want to treat yourself to something and that’s perfectly understandable. You probably had your eyes on a new suit, a pair of shoes or maybe even a new gadget electronic. Whatever you decided to spend your return on, give yourself a limit and try to keep your purchase slightly under that.
Toast to your tax refund
We know each year taxes can be stressful but how about you celebrate it being over with this cocktail properly titled “The Income Tax Cocktail” made with Bluecoat Barrel Finished Gin. The cocktail is made with Bluecoat Barrel Finished Gin, fresh orange juice, two types of vermouths and bitters which give it a rounded, complex flavor – just like those dreaded tax returns.
The Income Tax Cocktail:
- 1 1/2 ounces Bluecoat Barrel Finished Gin
- 3/4 ounce sweet vermouth
- 3/4 ounce dry vermouth
- 1/2 ounce fresh squeezed orange juice
- 2 dashes of Angostura Bitters
Combine all ingredients into a cocktail shaker filled with ice, and shake vigorously. Double strain into a chilled cocktail glass. Garnish with an expressed orange twist