Good news: Tax season is over. Better news: A hefty tax refund may be on its way to your bank account. The average tax refund this year is $2,700 according to the IRS. That's a nice little windfall for the start of summer.
Deciding how to spend a lump sum of cash is a nice problem to have. Here are a couple ideas from us at Credit.com:
- Invest in a local service – Support your local economy. Have your carpets cleaned, hire a handyman for that nagging home repair project, or pick up a gallon of paint at your neighborhood hardware store for a home repainting job. Invest some of your tax refund in a project with lasting value for you that will also be a boost for the community.
- Invest in yourself – Is there a certification that could help your career? A class you could take to boost your skills? Or a hobby you always wanted to learn? Apply some of your tax refund toward self-improvement projects.
- Invest in the stock market – Put a little of your funny money toward "sale-priced" stocks in today's low market. If you don't already have an IRA, this might be just the thing to jump-start some retirement savings.
- Invest on travel – Like we said last week, there are some amazing travel deals currently available. Look for package deals or cruises to get the steepest discounts.
- Invest in your debts – This one may not seem as fun as the previous suggestions, but think of how happy you'd be to completely pay off one of your credit cards or loans. Any payment toward debt is good, but one where you'd get the entire account back to zero would probably have the greatest psychological benefit.
- Invest for an emergency – The anniversary of the 1906 San Francisco earthquake is coming up this weekend, and it has me thinking about worst-case-scenarios. Does your family have emergency supplies for a natural disaster? What about emergency savings for a job loss?
How are you using your tax refund this year? Share your ideas in the comments section below.