Many people view their tax refund as “free money,” and blow it on a vacation or shopping spree. But the reality is that your tax refund is a part of your annual income. It is money you worked hard for. Our consumer loans experts in Delaware, Nevada, Utah, and California, encourage you to reconsider what you do with your tax refund this spring. Instead of splurging on material goods, try investing your good fortune in a way that will give you a better financial cushion.
3 Ways to Invest Your Tax Refund
We suggest investing your refund in one of three ways:
- Put It in a Savings Account
It may seem simple, but it’s effective. According to a 2016 GoBankingRates Survey, 69% of Americans have less than $1,000 in their savings account. Thirty-four percent have no savings at all. Even if you were to only invest a few hundred dollars into your savings, you would be better off than 34% of Americans. If you invested your entire tax refund (the average of which is $3,120), you would be three times better off than the majority of your peers.
- Make an Investment
Maybe you’ve wanted to make a large investment, but you’ve been waiting for that financial cushion that will allow you to do so. Because your tax refund is money you didn’t technically have before, use it to take a calculated risk. Invest in real estate, a tech startup or even an up-and-coming stock.
- Pay Off a High-Interest Loan
By using your tax refund to pay off a high-interest loan, you can save thousands of dollars in the long run. You can also ease your financial burden in the present by saving the money that you were using to make monthly payments on the loan.
While it is up to you what you do with your money, their consumer loans experts encourage you to invest, not spend. By making smart choices with your money now, you are setting yourself up for a comfortable financial future.
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