Your Tax Refund – Don’t Blow It
April 01, 2015
Many people will be getting a tax refund this spring. For many, that tax refund money will be a nice chunk of change. A report from Kiplinger released on March 27th, 2014 states that the average refund has been around $3,000 for the past two years. But remember, if you are getting a large refund every year, you should consider changing your withholding from your paycheck. If you are getting a refund, it is like giving a free loan to the government all year and receiving nothing in return.
If you do get a large refund this year, don’t blow it! Here are some ways people tend to blow their refund as well as a good alternative way of using your refund:
• Wasted opportunity: Make a down payment on a $25,000 boat.
Better option: Before you take on more debt, pay off the debt you already have.
• Wasted opportunity: Splurge on designer shoes and handbags.
Better option: Open up a money market account.
• Wasted opportunity: Hit the casino.
Better option: Contribute into your Roth or Traditional IRA.
• Wasted opportunity: Buy an above ground pool.
Better option: Increase the value of your home by adding a backsplash, painting a room, or replacing your sink.
• Wasted opportunity: Buy the biggest TV you can find.
Better option: Fund this year’s holiday giving or set aside the money for your next vacation.
This information is not intended to be a substitute for specific tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.