The Spring season signals the beginning of new life and regrowth. This same principle from nature can also apply to your finances. If you are expecting a tax refund, consider investing into your own future. Have a plan in place well before the check comes in the mail or the direct deposit hits your bank account. The temptation to splurge on impulse purchases may overcome your good sense and ruin investment ideas. Here are a few tax return investment ideas to get you started.
At first glance, paying off existing debt may not seem like an investment plan. But, consider how much you are spending on those high interest credit card payments each month. Are you close to your credit limit on those cards? That is even more reason to pay these balances off or at least down. You can redirect those monthly payments to a plan that makes you money, and you will boost your credit rating as you pay down debt.
Maximize Workplace Benefits
Play your cards right and put money aside for those daily living expenses while you boost your employer sponsored retirement plan contribution. Having a safety net in the bank allows you to finally maximize your company match, and you’ll realize that one or two additional percent really wasn’t noticeable in your paycheck anyway.
Personal Retirement and Health Savings Plans
Most retirees realize that their employer sponsored 401(k) or 403(b) alone are not enough to fund retirement dreams. If you do not already have an IRA, traditional or Roth, use your tax refund to get these started. You can also invest in a Health Savings Account, independently or through an employer. Either way, the tax benefits are incredible and you can enjoy reduced health care expenses and qualified OTC healthcare items.
So you have successfully increased your personal retirement contributions and paid off some of your debt. Maybe you even decided to dabble in the stock market and invested through a fee free app. You should be feeling pretty good about your decisions! Why not share the wealth and help those less fortunate? Remember that your donations are often tax deductible, so you are helping yourself as well. Happy investing!
The information provided above is a suggestion. Please seek advice from your financial advisor before making any financial decisions.