The following post is from Melissa Batai
Every year, many Americans contemplate what they should do with their tax refund. In fact, almost 80% of Americans get a tax refund, according to CNN Money. With the average refund being $2,893 (CNN Money), this amount is not insignificant.
If you use your refund wisely, it can help you save money all year long, or even better, help you make more money.
Consider these uses:
Invest in quality meat. If you like to feed your family healthy, grass fed meat, you know that buying it from a specialized market or at the grocery store can be costly. A better alternative is to use part of your refund to buy ¼ or ½ a side of beef. We do this every year. The meat averages out to $6 per pound regardless of the cut and type. While half of our meat is basic ground beef, the other half includes cuts like T-bone steaks, tenderloins, roasts, and stew meat, to name a few.
By paying for this purchase in bulk, you free up more grocery money to use throughout the year AND you also get better quality food.
Invest in a paying hobby. I love to sew. Last year, we used part of our tax refund to buy a basic sewing machine to replace my 25 year old broken one. I was able to sew many of our Christmas gifts for our kids, including Little House on the Prairie pioneer dresses for my daughters who love the series. While the sewing machine hasn’t quite paid for itself yet, it will this upcoming year.
If you have a hobby that you can turn into a business making venture, why not use some of your tax refund to buy the supplies that you need?
Invest in a class. Whether you work from home or in an office, you can’t go wrong with investing in a class or two. For instance, let’s say you’re good with social media but need to learn a bit more before you can do it as a paying side gig. Why not invest some of the money in a class so you can then start doing social media for others? With your new income stream, the course will eventually pay for itself and then some.
Invest in your retirement. There’s no better time to invest than now. The money that you invest today can mushroom and grow thanks to the power of compound interest. If you’re in your twenties or thirties, the money will easily more than double itself by the time you retire. If you’re in your forties or fifties, this is a great time to bulk up your retirement savings.
Invest in a college fund for your child. Again, thanks to the power of compound interest, the faster you can get the money in an investment account for your child, the better.
Of course, financial experts always suggest that you use the money to pay off debt. That is a good suggestion, as long as you make sure not to go right back in debt again. Too often people pay off their debt only to run it back up in a year or two.
Do you use your tax refund to make money in the future? If so, how?