As the end of March rolls around, it’s become clear: Everyone’s favorite season is here! No, no– I’m not talking about Spring. Rather, I’m talking about a season that’s just as unavoidable, whether you hate doing them and have others do it for you, love doing them and have others help you, or simply roll up your sleeves and knock them out yourself; I’m talking, of course, about tax season.
The last day to file individual taxes–April 18, 2017–is rapidly approaching, which means (if you haven’t filed and received it already) your refund is also soon to be on its way. And, according to CNN, in 2015, the average tax return was around $3,000.
So: What should you do with that refund? We’ve got a few tips below on how to use that extra income.
#1 Start, or add to, an emergency fund
An emergency savings account is a crucial part of anybody’s finances because it’s the money that’s going to cover costs when an emergency strikes (which, of course, you cannot prepare for and is bound to happen). Most financial experts agree you should set aside between three and six months’ worth of expenses in your emergency savings account, which should remain separate from a traditional savings account.
#2 Use it to pay off your debts.
Start with the higher-interest ones first, whether that means paying off your mortgage, credit card debt or student loans.
#3 Start, or boost, your retirement fund–or a child’s college fund.
The present is never a bad time to start thinking about the future.
#4 Replace old appliances with energy-efficient ones.
Sure, you’re paying more now. But you’ll most likely save more in the future.
#5 Make purchases you know you’ll make, like a monthly bus pass, car repair or winter clothing.
These purchases are inevitable anyway.
#6 If your finances are in tip-top shape, use some of the money on a vacation or home-improvement project.
It’s OK to treat yourself a little; we’re all human, after all.
#7 Donate it!
In our opinion, there are few better ways to spend your money than on those in need. Remember: There’s always someone less fortunate than you are!