It's that time of year again! The tax refund checks are going to start rolling in soon, and some people can wait to get their hands on what feels like "free money." (We know it's not free, but getting a lump sum like that can feel like a special little reward.)
Thanks, Uncle Sam. (source)
But what to do with that cash? The obvious answer is to save it, but sometimes that's not an option for people with pressing needs. Notmadeofmoney.com
has some pretty cool suggestions on what you can do with that refund check, regardless of how much it is.
1) Pay off debt. Annihilate that credit card balance that's been bugging you for months. Put a chunk down on your student loans. It's always smart to pay down the debt with the highest interest rate first, and then if you have some left over, move on to a lower-interest debt. It feels pretty good to make a dent in your debt payments!
2) Start an emergency fund. Having a little bit of spare cash for the unexpected can put your mind at ease, as with the case of my friend who emerged from class to find a fork jammed in his tire. No one could have predicted that.
3) Start investing. If you're debt-free and already have some cash in the bank, consider a foray into investing. If you're smart, you can make even more money on your tax refund.
4) Prepay bills. Most utility companies let you pay bills in advance, so you'll be able to rest easy for a few months. Just don't forget to pay your bills again when the time comes!
5) Pay for needed repairs. Spending your refund on car repairs (like replacing a tire that got forked) or replacing some worn-out appliances isn't a bad idea. You'll have to pay for these things eventually, so you may as well do it while you have the cash!
It's definitely tempting to run out and buy the latest Sims 3 expansion pack (VERY, VERY tempting), but blowing your refund on things you don't need can come back to haunt you later. For a small treat, consider going out to a movie or getting ice cream to avoid feeling deprived. It usually works for me!
Any other suggestions? Leave them here or over on Facebook.