Top 10 Ways to Spend Your Tax Refund

April 17, 2018

Right now, many taxpayers across the country are getting what amounts to an extra payday—the almighty tax refund. If it turns out you overpaid taxes last year, the IRS will put your money back in your pocket. While you are waiting for that Uncle Sam deposit to hit your account, here are some practical ways to put that newly discovered cash to use.

1. Open a Renasant Savings Account

Balancing The Account by kenteegardin, on Flickr
Balancing The Account” (CC BY-SA 2.0) by kenteegardin

Shameless plug alert! But seriously, using your refund to open a personal savings account is a great way to grow your money, don’t you think? Click here to learn more about our Renasant Savings Account.

2. Contribute to a Retirement Fund

Retirement Jar by aag_photos, on Flickr
Retirement Jar” (CC BY-SA 2.0) by aag_photos

We know retirement feels far away, but it may be best to make it a financial priority now. Hold on to your refund and explore some IRA options, just in case Social Security doesn’t quite cut it.

3. Pay Off Your Credit Card Debt

Credit Cards by perspec_photo88, on Flickr
Credit Cards” (CC BY-SA 2.0) by perspec_photo88

Use your refund to pay down a big chunk of your credit card balance. You might save on interest in the long run—and you’ll breathe a little easier, too.

4. Start a College Fund

education process by Elaine_Smith, on Flickr
education process” (Public Domain) by Elaine_Smith

Although we’re sure your kid is going to be the next athletic phenom (which means you’ll never pay a dime for college), it’s safe to hedge your bets. Put your refund toward a new, “just-in-case” college fund.

5. Upgrade an Appliance

Manna House by Jeremy Levine Design, on Flickr
Manna House” (CC BY 2.0) by Jeremy Levine Design

Did you know LG makes a fridge that texts you when you’re low on milk? Modern appliances have risen to a whole new level, and if you’re still popping ice cubes out of a tray, it may be time to consider an upgrade.

6. Make an Investment

Graph With Stacks Of Coins by kenteegardin, on Flickr
Graph With Stacks Of Coins” (CC BY-SA 2.0) by kenteegardin

We won’t give you any suggestions as to where you might invest, but using your refund to further diversify your holdings may be the best financial decision you make right now.

7. Start an Emergency Fund

Broken Piggy Bank by 401(K) 2013, on Flickr
Broken Piggy Bank” (CC BY-SA 2.0) by 401(K) 2013

Experts recommend tucking away three to nine months of living expenses in case of a financial emergency. If you aren’t quite there yet, your refund could get you on the right track.

8. Start Thinking About a House

Mortgage by cafecredit, on Flickr
Mortgage” (CC BY 2.0) by cafecredit

Maybe you’re thinking big with this year’s refund. It may not be enough to cover a down payment on your dream home, but this influx of cash could push you a little closer toward your goal of becoming a homeowner.

9. Roll Up Your Sleeves and Start a Business

open by Sean McMenemy, on Flickr
open” (CC BY 2.0) by Sean McMenemy

Invest in yourself. Roll up your sleeves and see if you can make your dream of owning a business a reality.

10. Treat Yo Self

shopping by Sole Treadmill, on Flickr
shopping” (CC BY 2.0) by Sole Treadmill

Go ahead and pick up that pair of shoes you’ve been eyeing. We don’t recommend spending your return all in one place, but you’ve worked hard all year for this. You deserve it.

This is not financial advice for your specific situation or circumstances.

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