It’s almost tax return season, which means many people will get lump sums of money with no instructions on how to use it. How can you be one of the few who uses that lump sum of money wisely? How can you make it grow?
Use these tips:
- Start an emergency fund. An emergency fund is what it sounds like – you use it for emergencies. No, a new pair of shoes is not an emergency. A new car is also not an emergency. This fund would be for instances you couldn’t prepare for, like a furnace going out, or God forbid, your Keurig breaking.
- Use it for a down payment on a home. Interest rates are low right now and they’re only going to increase, so now is the time to buy a home. Plus, Centra is offering a special $250 off closing cost deal right now to make the deal even sweeter.
- Pay on existing debt. This is probably the least fun of the tips we’ve mentioned so far, but the less debt you have, the fewer monthly bills you must pay. When you have fewer monthly bills, you can spend more on fun things.
- Add to college funds (or wedding funds). No matter what stage of life you’re in, there’s likely some big event you could be saving for. Whether you save for a college, or a wedding, you will be glad you did.
- Start or add to an IRA. This is a great idea especially if you have a long time before you retire. If you talk to a financial advisor, you’ll be shocked to find out just how much your money could grow between when you invest it and when you take it out for retirement.
- Upgrade your home. Doing home improvements could really pay off when you sell. Do some research and find out how you can use your tax return to do home improvements that will make the biggest difference in your selling price. Upgrading the kitchen will impact your bottom line and there are some other real money makers too.
- Donate. Maybe you already have an emergency fund and you’ve already saved for upcoming events and retirement. If that’s the case, at least consider donating a little of your refund. Find a cause you’re passionate about, whether it’s animals or the elderly and give to an organization that works with to further the cause you’re passionate about.
Need more tips on ways to use your tax return wisely? Click the appointment button above to schedule time to talk with a Financial Planner from Centra Financial Services.