Think Before You Spend! Ideas for Tax Refund or Stimulus Check
It’s tax season and for different people, this means different things. For some, tax payments are due😞. For others, a tax refund is owed😊.
Hopefully, you’re in that second group. If you are, you are in luck! Proceed with caution though, it is important to have a plan for the money so that you do not squander it all. The same holds true if you were to receive a stimulus check; proceed with caution.
Recently, I was watching an episode of Shameless. Upon receiving a tax refund check, one of the characters was immediately tempted to spend the money. He felt like it needed to be spent and needed to be spent immediately. Unfortunately, his ideas were to spend the money on wasteful things like the lottery, casino, etc. This is a prime example of what not to do.🤑
There are many ways that you may choose to spend any extra income, and of course, you know your situation best. Below are some ideas to get you started.
Hopefully, you’re in that second group. If you are, you are in luck! Proceed with caution though, it is important to have a plan for the money so that you do not squander it all. The same holds true if you were to receive a stimulus check; proceed with caution.
Recently, I was watching an episode of Shameless. Upon receiving a tax refund check, one of the characters was immediately tempted to spend the money. He felt like it needed to be spent and needed to be spent immediately. Unfortunately, his ideas were to spend the money on wasteful things like the lottery, casino, etc. This is a prime example of what not to do.🤑
There are many ways that you may choose to spend any extra income, and of course, you know your situation best. Below are some ideas to get you started.
10 Ideas on what to do with a tax refund or stimulus check:
- Pay off/down high-interest debt.
- If you do not have enough to pay it off, pay a little more than you usually would.
- Have a mortgage? Pay a little extra on your next mortgage payment or make an extra payment.
- Pay bills on time.
- While some companies may be providing a little flexibility, the last thing you want to do is get behind on payments if within your control.
- Put a little more towards a car note.
- You could even make an extra payment and always apply to principle, if possible.
- Open a savings account or CD.
- Add to an existing rainy-day fund or start one.
- Stock up on household items.
- Prepay some expenses.
- For example, get a multi-year car registration instead of the standard annual registration.
- Pay a little more on utility bills to have a credit that'll help on future bills.
- Make a full payment on auto insurance premium (6-Months to a Year).
- Contribute additional funds to your retirement account.
- Open and contribute to a Roth IRA.
The key is to use the money you get today to put you in a better position tomorrow. It is perfectly okay to treat yourself to something nice, but be reasonable.
Managing Money Like a Boss is about making wise choices that can potentially improve your economic future. Enjoy any possible refund or stimulus check by allowing 20% (or less) for fun putting the remaining 80% (or more)towards responsibilities.