According to the IRS, 8 out of 10 people will get a tax refund this year with the average being about $2,800 per check. Maybe you’ve already received yours?!?!
It is tempting to splurge and have fun with a refund but remember; this isn’t “found money.” It’s YOUR money that the government has been holding for you for the past year at 0% interest. Having a little fun is healthy, but we highly encourage you to work through the following suggestions first. If, at the end, you have some of the refund leftover, have fun – and support our local community with a night out. Canton Street in Roswell is a favorite of the Odyssey family with its fun shops and great restaurants.
Things to consider:
Pay off debt. The best thing to do with a refund is to pay off credit cards or other high interest consumer debt.
Save for retirement. Once you have taken care of consumer debt, maximize your retirement savings – an employer 401k or 403b at least up to the match (if offered). Are you eligible to contribute to a Roth IRA?
Emergency savings. To avoid using credit cards to pay for the “next” unexpected repair, build up your cash savings. This will allow you to avoid creating more debt the next time an unexpected expense occurs.
College fund. Once all of the above are addressed - and if you have young children - you may want to consider opening or contributing regularly to a 529 plan. The cost of college isn’t getting any cheaper.
Good maintenance habits. Have you been putting off some much-needed home repairs? What about your vehicle? Good maintenance habits can save you money in the long run by avoiding costly repairs. In some cases you can increase the value of your home with simple, seasonal upkeep.
Make a difference. Most of us like to support a favorite charitable organization. Donations can significantly help your local church and/or a local charity, and they may be tax deductible. If you’ve run out of refund money, consider volunteering your time instead!
We have found that the more fiscally responsible people become, the more likely they are to enjoy helping others, while also sufficiently building enough wealth to retire comfortably and possibly leave a legacy. This is far more satisfying than any short term spending spree!!