Expecting a tax refund?
This year, the average tax refund is estimated at just shy of $3,000 ($2,900 to be exact).
Here’s 5 great ideas on how to put that refund to best use:
Pay off credit card debt. “Using your refund to pay off a balance with an 18% interest rate is like earning 18% on your investments,” says Kim Lankford of Kiplinger’s.
Expand your horizons. Stop procrastinating and plan a trip to that place you’ve always been dreaming about. After all, you’re not getting any younger. Travel can recharge your batteries, change your perspective, and reorient your priorities. No travel companion? Not a problem. Plenty of trips are geared to single travelers.
Downpayment on that diploma. If you already have a college 529 plan set up for the kids, toss in the extra dollars. You’re certain to always need more! No plan yet? Ask us to point you in the right direction. College 529 plans hit the trifecta. They grow free of tax, college withdrawals are tax-free, and some states even give you tax deductions for contributing.
Catch up on retirement. Not funding a Roth IRA? If you’re eligible, that should be tops on your “to do” list. Every dollar you move into a Roth IRA – and all earnings until the end of time – will be forever tax-free, under current law. You can contribute up to $5,500 per year ($6,500 if age 50 or over). A non-working spouse can contribute as well, as long as total working income is equal or greater to both contributions. (A bonus idea? Fund a Roth IRA for your working-age kids).
A little bitty splurge. You deserve a mini-treat. Take yourself out for a night on the town, or buy that special something you’ve had your eye on for months. Stash whatever is left in your emergency fund so you’re prepared for whatever the world sends your way.