Are you expecting a fat refund check from the IRS this year? Congratulations! You could splurge on five new pairs of shoes or test your luck in Vegas. Or, you could put that money to work for you.
The average tax refund is, give or take, around $3,000. That’s plenty of money to treat yourself (one pair of shoes and a few lottery tickets?) and spend wisely. Here are five ways to stretch your windfall.
- Pay off or pay down a high-interest credit card balance.
- Open a savings account and create an emergency fund. (Savings accounts pay very little interest, but stashing your money in its own account rather than in your checking account significantly lowers the likelihood that you’ll spend it. It’s that out-of-sight, out-of-mind scenario…)
- Purchase something you legitimately need (the key word here being legitimately!) If your car is repeatedly in the shop, you may need a new one. If the paint on your house is peeling, it probably needs a paint job.
- Invest in your future by taking classes or receiving training that could help you further your career.
- Upgrade an old, energy-sucking appliance with an energy-efficient model that will reduce your monthly electricity bills.