For those lucky taxpayers who expect to receive a refund check from the government this year, the blessing of a tax return could turn out to be a curse in disguise. Will you diligently save this bonus or will temptation get the better of you in favor of a new TV or summer vacation? There are plenty of ways to responsibly use your tax return, and not all have to be unexciting or particularly damaging to your budget. Here are 4 ways you could put the extra cash to good use.
Make a down payment for that much-needed car.
With summer just around the corner, you may be starting to consider a new vehicle - maybe even your first! The more you can afford to put down in cash on the purchase, the less you'll end up paying each month. So instead of blowing your hard-earned money on unnecessary purchases, you could use it for a better car to get you where you need to go.
Pay off your debt.
Let's be honest, this one may not sound like the most "fun" activity in the world, but consider the alternative: ever-growing credit card bills can really begin to crush your spirit. If a tax refund can help to wipe out a good chunk of your debt, it's certain that you'll feel a major weight off your shoulders. Then you can focus on the fun stuff.
One way to spend excess cash is to use it to help others in need. You could make a small donation to your favorite charity (every little bit counts). It always feels good to do good, and your gift may even be tax deductible for next year. It's a win-win!
Whatever you do, don't forget to put some cash away for a rainy day.
Americans as a whole may not be saving a whole lot of their incomes, as evidenced by the personal saving rate in the U.S. So make sure you do your part to turn that trend around and stash at least some of your tax refund in a savings account. This will ensure that you aren't left high and dry if an unexpected emergency happens to arise.