5 ways to invest your tax refund

In the article, “Average income tax refund jumps by 10% to $3,036”, writer Sandra Block states that the average tax refund has gone up $266.00. Given the economic challenges so many people have been faced with, this is certainly welcome news. Block notes that Vice President Biden will be promoting the benefits of the Recovery Act of 2009, which many believe to be the reason for the increase in tax refunds. Getting the maximum refund you are entitled to is one issue, but a nice “problem” to have is how to use the additional money! Here we’ll discuss 5 ways you can invest some or all of your tax refund and potentially receive much more than $3,036.00 in value! 

1) Buy something special for your spouse.

Household bliss is part of a strong foundation from which financial strength comes. Why? If you have the distraction of angst at home you will not be focusing your efforts on managing your money, running a small business, or marketing your work skills.

Tell your spouse she is important to you by giving her a small, but meaningful gift. Think putting more money in your savings account is a good investment? Try making your spouse feel special and see the return on investment you get!

Can you make this gift an asset at the same time? Think about giving a gift that adds value to her life and the household. Will it create more free time for her? Will it save money or solve a problem?

2) Pay down debt.

Many financial experts justifiably support living on cash and avoiding credit. However, there are purchases, such as a home, that are simply too big for someone to pay cash up front. Additionally, when a family’s income is decreased by job loss, work hours reduction, or a medical issue it is good to have access to loans or other sources of temporary, emergency financing. At those times access to inexpensive borrowing is critical, especially when walking a fine line of balancing a household budget during economic hardships.  

Blake Ellis notes in “5 credit score killers” that high credit utilization can lower your credit score, even if you are paying your bills on time. “Your debt utilization ratio accounts for almost 30% of your score. So carrying too much debt will not only cost you a fortune in interest, it can also destroy your credit rating”, writes Ellis. Using part of your tax refund to pay down debt can put your credit utilization more in line with achieving a higher credit score.  

3) Stock up on great bargains.

Now is a perfect time to put aside some money to take advantage of sales and other great bargains. The best savings come from stockpiling products that you purchase for extremely low prices. How do you make that happen?

Try real world auctions and estate sales. For instance, were you going to buy patio furniture with your tax refund? Look at the auction listings in the newspaper or online at AuctionZip.com. Nearly every week there are many auctions that sell items in great condition for pennies on the dollar.

Want to cut your household goods and grocery expenses by up to 70%? Combine high value coupons (found online; you can buy them on eBay or here), store sales, and insider guidance online. Great deals are not hard to find once you know where to look. When you find them take advantage of the opportunity and stock up! 

4) Invest in your home’s curb appeal.

The first thing you and potential buyers see when pulling up to your home is the front entrance and exterior features.

Why invest in curb appeal? It makes you feel good to come home to a beautiful setting. It also could increase the value of your home.

If you find yourself in a position where you want to or need to sell your home this year it is curb appeal that will draw in more buyers. People tend to make quick judgments based on the first few seconds they see something. Make your home stand out in those seconds. 

5) Take a non-credit professional class at the community college.

This will help you develop new skills or enhance skills you already have. Classes can be tax deductible, and it is a good way to be become more valuable at work, thus improving your ability to stay employed even when others are being asked to leave.

Continued learning classes also make you more marketable when looking for work. Taking classes that enhance skills hiring companies are looking for will help you stand out from the crowd.

Many people have talked about leveraging their skills into a small business. Non-credit classes provide access to professionals who have the experience running small companies and are eager to share their expertise with you.

 
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The Quarter Roll is published to provide personal insights and opinions on everyday ways of saving and managing money, budgeting, and reducing debt. The Quarter Roll does not give professional accounting, legal, or investing counsel. The ideas, examples, and advice presented on this site are solely the opinion of the authors based on his or her personal experiences. All photos courtesy of The Quarter Roll, iStockphoto, or Dreamstime. © All rights reserved. This site is best viewed when using Adobe Flash Player. the quarter roll magazine financial entertainment