I get a HUGE tax refund back every year and I’m wondering how I should invest the money?
February 26, 2014
Getting a huge tax refund back every year is NOT a good thing. If you have a refund every year, this means you are giving the government an interest-free loan. It's better to have a larger paycheck every month and use the money throughout the year to spend, save or invest. If you are using credit cards throughout the year you are being charged an interest on those purchases and this can dramatically hurt your financial situation. Take the refund and pay off any credit card debt that you have, fund your Traditional or Roth IRA or put the money in a money market account to build some liquid money. Make sure to change your withholding for next year to minimize your refund and get more each paycheck throughout the year. You can then automatically set up that extra money in your paycheck to go into your Traditional or Roth IRA.