10 Smart Ways to Invest Your Tax Return

10 Smart Ways to Invest Your Tax Return

Saving money can be easier said than done. From buying groceries to filling up your tank, life’s daily tasks can add up, especially when emergencies arise. However, bulking up your savings and planning for your future are smart financial goals that can protect you in the event of a crisis. With tax season just around the corner, it’s time to think about how you could get the most from your tax return. There are many smart, productive ways to spend your tax refund this spring, such as setting up an emergency fund, paying off debt, or planning for your retirement to help you have peace-of-mind now and in the future. To see an estimate of what your tax return could be, check out this free tax refund calculator, and start planning how you’d like to invest your funds!

1. Pay your dues

After receiving your tax return, one of the best places to allocate your funds is toward any existing debt. If you have a goal of paying off your debt, using tax refund dollars is one of the smartest ways to make it happen. You’ll save money on your bills by spending less on interest rates without necessarily missing any of your dough. Talk about a win-win!

2. Split your refund into multiple accounts

Did you know the IRS allows you to divide your tax refund among multiple bank accounts through direct deposit? A split refund can be deposited into three accounts in amounts of your choosing. This way, you can beef up your savings and send funds to your checking account for more pressing needs. Opting for direct deposit is also the quickest way to see your tax return this spring.

3.  Set up an emergency fund

Putting your tax return in an emergency fund is one of the easiest ways to save for life’s crises. You can designate a portion of your refund or put the entire amount into a separate account, so you won’t have to put expensive costs on credit cards, like unexpected car repairs or emergency room visits. If you don’t have an emergency fund, create one with your tax return this year to protect yourself from financial damage.

4. Start a college fund

If you’re a parent deciding how to use your tax return, consider saving for your children’s college education through a 529 plan. You can contribute to your 529 plan with tax-exempt dollars at any time. With rising tuition costs, your kids will thank you for putting money aside to help them pay for their bright futures!

5. Plan for retirement

Saving for retirement is one of the smartest ways you can plan for your future, especially when you can quickly send your tax return straight to your 401(k) or other retirement savings fund. When the time comes for you to retire, you’ll thank yourself for setting up a reliable retirement plan. Think about how important your freedom will be when the time comes for you to start your next phase of life!

6. Make an extra mortgage payment

If you’re a homeowner, consider making an extra payment or two on your mortgage with your tax return. Making mortgage payments in advance is a smart way to save money over time since a chunk of your mortgage payments goes to interest. You can significantly decrease the amount of interest that you pay in the long run by making extra payments on your home sweet home.

7. Buy into the stock market

If you don’t have pressing financial obligations and you’re looking for an excellent way to spend your tax return, consider joining the stock market. You can work with a broker to buy into mutual funds (multiple stocks) or invest in specific stocks, like these top ten stocks of the year.

8. Improve your home

Many homeowners have plenty of to-do’s that never seem to get completed. From repairing the garage door to updating that out-of-date bathroom, your tax return could help you check off home improvement projects from your list. You can also save money by installing new appliances or windows that use less energy, ultimately decreasing your utility bills to keep more cash in your wallet each month.

9. Schedule car maintenance

Start your spring cleaning by giving your car some TLC with your tax refund. Cold weather can take a toll on your vehicle, so schedule a maintenance check to keep your vehicle in tip-top shape for spring and summer. If you find out you need new tires or your technician recommends a transmission fluid change, you can put your tax refund toward these expenses. You could also take care of any car issues that you have been putting off before they become more serious!

10. Purchase auto insurance

Who doesn’t want to save money on car insurance? ABC Insurance Agencies finds affordable auto insurance for Louisiana and Texas drivers that they can rely on every day of the year. Use part of your tax return to purchase a quality car insurance policy from ABC – we work with multiple insurance companies to find you the cheapest rates to fit your budget and lifestyle, so you do the saving while we do the shopping. Call , click, or visit a friendly agent near you to get a quote, find out if you qualify for any of our discounts, and start saving on your car insurance today!

The information provided in this blog is designed to give helpful advice on the topic discussed. It is not intended to provide legal or any other type of advice and is not meant to be a thorough discussion of every issue that a person should consider or may encounter. ABC is not responsible or liable for the availability of links to websites or resources, or for any content, advertising, products, services or other materials on or available through these websites or resources or your reliance thereon. Any references to third party rates or products are subject to change without notice. Trademarks are property of their respective owners. ABC Insurance Agencies-members of the National General Insurance Group, Winston-Salem, NC.

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