10 Smart Ways to Spend Your Tax Return

It is that time of the year again and you could not be more excited about your tax return.
You have paid your dues all year long and now it is time to “splurge”! But could you be over yourself when it comes to spending you hard earned tax return money? There are smarter ways to spend it where you can put yourself in a better financial situation all year long.

1. Add some money to your emergency fund.
First things first. This is a priority for any family in the U.S. given the present economic roller coaster. Even if you add $1,000 to a savings account, you will be better off than 45% of the country who live from paycheck to paycheck.

2. Pay down your credit cards.
Before you go out and start making some more debt, pay down your existing debt. If you are making your minimum payment, pay a little more than that. This is an easy way to improve your credit scores and also get some more leeway with your credit card companies, and as a bonus, they will be more willing to work with you in the future, seeing you are taking the responsible approach. But the main reason is you would be avoiding additional interest – you do not want to pay yesterday’s lunch for the next 15 years.

3. Invest in your credit.
Yes, we are a credit repair company, meaning this one would have to make the list. In truth, much of your financial future depends on your credit. Many of your dreams will only become real if your credit is good enough. The dream of owning a home, the dream of a specific car, the dream of pursuing your education. The benefits are many and although we could go on and on about the reasons why you should have good credit, the number one reason for taking the first step is getting closer to your big dream. And your tax return allows you to do just that.

How Credit Works 4. Invest in your career.
Getting hired, getting a new promotion or shifting your career to a higher paying job along with good credit, it requires new skills. Spend money on continuing education courses, a weekend conference or an online class to learn a new skill. Many of them are only a couple of hundred dollars and they will be a nice add to your resume when applying for more pay.

5. Invest in your home.
If you already own a home, your tax refund can be multiplied by making some upgrades in your home. Changing the flooring, adding an extra bathroom, opening up your kitchen, all add substantial value to your home according to ehow.com. This is an investment that it is likely to pay off not only long term but also in the near future.

6. Maintenance projects.
No one likes to spend money on a new set of tires. But postponing it might cost you more in the near future. Same as fixing up that fence, that leaky roof or replacing the furnace.
If you have an older home, you may also be able to take advantage of the energy tax credit. Buying energy efficient furnaces and air conditioners and replacing roofs won’t just prevent problems, they’ll improve your home’s energy efficiency and earn a federal tax credit on next year’s return.

7. Take care of those student loans.
As you must already know, there is no statute of limitations on student loans. Meaning student loans never expire. Applying some funds to your student loans will cover your monthly payment for a long period of time, so while building a nice payment history, you don’t have to worry about being late and dinging your credit scores.
If you are in trouble with your student loans, a smart way to spend your tax return is applying for a student loan consolidation program. You can spread out your monthly payments in up to 30 years and your student loans can come off collection status so you can get approved for a FHA home loan.

8. Insurance.
Renter’s insurance is very cheap (average of $100/year) and it can really help you out. Whereas Homeowners insurance is mandatory, renter’s insurance is not. Renter’s insurance can even cover your personal belongings that are not located in your home.

9. Energy Audit.
The average household energy bill increases with each passing year. Either due to new electronics in the house or as you house gets older, it will not be as energy efficient. An energy audit can show you where to seal up leaks and add insulation, thus saving a lot of money in utility expenses in the next upcoming years.

10. Add to your retirement account.
You have plenty of options for stashing money away for your retirement years, but in general you will want to first max out any account that includes an employer match. If your employer doesn’t offer a retirement plan or you’ve already put in enough to meet the matching requirement, consider starting an IRA. You’ll have more control over your investment options than with a tradition 401(k), and it’s an easy way to turbocharge your savings. The sooner you invest, the more time your money has to grow.

How Credit Works
There is a bright future in front of you. Everything happens for a reason and maybe the reason is you are willing to make responsible financial choices!

We are here to help you unlock your potential as your life will be so much easier if you take the correct path. We are a licensed and bonded credit repair company, helping clients all over the country reach their dreams for over 8 years.
Take a look at our before and after scenarios, along with our clients testimonials to see the improvement. We also work with many loan officers helping them close more loans.