For many of us who have recently graduated school or are still in school, tax season can be a happy time financially. Many people will get a tax refund from the IRS, and more will squander that money before it has a chance to make it through one statement. Here are some ways to spend it responsibly and feel good about it.
1. Let it Grow
Consider putting all of that money or part of it into a high-yield savings account. Instead of just holding on to it, why not let it grow while it’s sitting in your savings? Talk to the friendly folks at your local credit union about the right fit for your financial situation.
If you’ve been waiting on an injection of extra cash to take the first step, consider this your investment window. Finding the right investment opportunity for you and your financial outlook is much easier to do if you’ve got the cash on hand. Talk to your credit union to see what advice they offer for starting your portfolio.
3. Pay it Off
This one ties in closely to suggestion No. 1. If you’ve got a credit card or loan accruing more interest monthly than you would gain in a CD or similar account, consider paying that off. Take a look at your obligations and see if one of them can be knocked out all at once with a portion of that tax refund.
4. Give Yourself a Small Treat
It’s all right to spend a little on yourself. You work hard on your budget, and, hopefully, figured out a financially responsible way to spend a major portion that refund money. Take what’s left and buy yourself something fun.