7 Ideas to Use Your Tax Refunds

Tax refunds are expected by over 70% of filers, which may make you want to go all out with your money. You might be concerned about the future and want to invest it or tuck it away for safekeeping. 

Can you imagine how you would spend your refund? 12% of Americans, according to a survey by the National Refund Federation, said they would spend their tax refunds on home improvement projects, and 10% said they would buy a new car or another important purchase with the money. The survey revealed that just 8% of respondents would use their refund for a vacation or splurge. 

Based on the IRS’s cumulative 2021 tax filing season statistics, there were 128 million refunds issued last year, a 3.1% increase from last year. The total refund was $355 billion. Refunds averaged $2,775, representing a jump of 11.2%!

You will enjoy thinking about how to use the money no matter what amount you receive. Check out these seven ideas to use your tax refund.  

Buy a Used Car With Your Tax Refund

You may not be able to afford that big-ticket item, but you can more than makeup for that by making a downpayment. Even though your refund may not be enough to cover the cost of a new or used vehicle entirely, it can still be used as a down payment for a new or used vehicle. Start by browsing some of the top used-car-buying sites. Do not restrict your search to your local area. You may wish to get a used car shipped to you if you find an affordable one out of state. You can do so by contacting Autostar Transport Express.

The Emergency Fund

If your refrigerator breaks or if you experience medical problems, damage your cell phone, or get into a major accident, you will be very glad to have that rainy day account. Savings of three to six months’ living expenses has been recommended by many financial experts. Despite that being daunting, you can begin now by adding to your tax refund from the previous month and keep adding to it every month. It’s a good idea to make sure your emergency fund can cover the full six months of expenses if you already have one. 

Fun And Fitness

Starting the new year with a renewed commitment to exercise and wellness is always a good idea. If you’re a fitness fanatic, it’s a great time to take the plunge and get started with CrossFit. Get your friend involved in a vegetarian cooking class, relax in a hatha yoga class or pick up a new pair of running shoes and hit the trails. It is possible to enjoy yourself and time with friends while staying healthy.  

Invest In Your Career

You are your best investment. You may now be able to add a certification or endorsement to your professional skill set. In addition to hiring a career coach, getting a few courses at a community college or local university, or even starting a business, if that’s something you’ve been wanting to do, could give your career a boost. 

Financial Freedom

Have trouble repaying your loan? Have credit card debts with high-interest rates? It is definitely beneficial to pay down or eliminate credit card debt. Suppose, for instance, that if you continued to pay the minimum on your credit card debt each month, you could save $3,585 in interest, as Net 30 accounts reports. Your refund may not completely cover all the balances on your credit card. If this is the case, you may want to look for a lower interest rate card. 

Home Renovations

There are probably some items on your homeowner’s list you would like to fix or improve. You can save money on your energy bills by replacing old roofs and windows. Perhaps there’s a new stove you’ve been eyeing or an outdoor playset for the kids. Painting a room is also a great update. Evergreen Fog is Sherwin-Williams’ color of the year for 2022. What are you waiting for?  

Donate To a Charity

Spending part of your tax refund on helping others is a good idea. You can also make a positive impact in your local community by donating to a local food bank or shelter. Your contribution could be used to advance research or enhance resources for a cause that means a lot to you. You may be able to reduce your tax burden by keeping track of your charitable gifts. Keep your receipts and records for the next year.