Tax season is almost here! You might not be thrilled about the process of filing your taxes, but you can get excited about all the possible ways to use your tax refund. The average tax refund in 2016 was about $3,000—that’s some serious cash! Not sure how to get the best bang for your buck with your tax refund? Check out our best ideas for maximizing your benefits from this year’s tax return.
Making the Most of Your Tax Refund
Before you even think about spending that tax return check, make sure you won’t have to give anyone else a portion of it. If you haven’t filed your taxes yet, look for a service or app that won’t charge a percentage of your refund as a service fee. Check out our list of places you can file your taxes for free if you don’t know where to start.
Already filed? Go you! You’re ahead of the game. Now the question is: What should you do with that tax return money? Sure, you could spend it all on a new gadget or a fancy night out. But before you let it burn a hole in your pocket, take a minute to consider some options that your future self—and your loved ones—will thank you for.
What Should I Do with My Tax Return?
Whether you choose to spend your tax refund all in one place or divide it up for multiple purposes, here’s how to use your tax return for something worthwhile.
1. Invest in your career.
Is there a professional certification or class that could score you a raise, a promotion, or even your dream job? Now’s the time to take the plunge! Set aside some of that tax return money and sign up for an online class that will give your professional goals the boost they need.
2. Give your loved ones (and yourself!) the experience of a lifetime.
Maybe it’s been a while since you’ve taken a family vacation, or perhaps you and your spouse’s favorite musician is coming to a nearby city this summer (Elton John’s epic farewell tour, anyone?). Material things may break, but memories last forever! If you can’t decide what to do with a tax refund check, consider using it to create treasured memories and experiences with those you love.
3. Start a college fund for your children.
You want the best for your children’s futures, and starting a college fund for them is a wonderful way to ensure that they’ll have access to higher education. If you live in a state that has state income taxes, you’ll likely be able to contribute to a 529 plan—which is a tax-exempt savings option for future college expenses. It’s never too early to put away those education dollars!
4. Save part of your refund and enter to win a cash prize.
Want to see your money turn into MORE money?! With programs like SaveYourRefund, you can use a specific tax form (IRS Form 8888) when you file your taxes to put part of your return into a savings account. Once you’ve filed and submitted your information to SaveYourRefund, you’ll be eligible to win a cash prize—meaning that tax refund money will go even further!
5. Start a small business or side hustle.
We all have a few “someday” dreams floating around in our minds. Is yours to start a business? If so, there’s no question about what to do with your tax refund—make your dream happen!
Use those tax dollars to invest in the supplies or equipment you need to get the ball rolling on your small business or new side hustle and make this year YOUR year to shine. Lacking inspiration? Tutoring and dog-walking are just a few of the many things busy people do for extra cash.
6. Pay off a whole year of insurance.
If you haven’t decided what to do with your tax refund, consider spending it on your peace of mind. How? By paying off a whole year of auto insurance, renters or home insurance, or life insurance. Put that chunk of change from your tax refund toward protecting your family, your home, and your car for the next year, and rest easy knowing that you and your loved ones are taken care of. To talk to an agent, call 1-877-GO-DIRECT (1-877-463-4732) or find a location near you.
Travel, invest, save, spend, or protect—the possibilities are practically endless, and the choice is yours! What are your unique ideas for how to use your tax refund this year? Let us know in the comments below!