For many, tax season is an exciting part of the year because it’s the one time of the year that they will have access to a large lump sum of money. I used to be in that number until I started earning over six figures in my home based business.
If you are looking forward to getting a refund this tax season, here are 5 smart things you can do with the money that will pay off in the run.
As in, INVEST IN YOUR FINANCIAL FUTURE! I have to be clear and over emphasize here because I used to be one of those people who thought getting my hair and nails done was me paying myself first. That’s NOT what paying yourself first means.
Paying yourself first means understanding that the person you are today is responsible for taking care of the person you will be 20 – 40 years from today. Put some money in a savings vehicle that will grow to support your future self and goals.
If you have bad credit I don’t have to tell you have costly living with it is. It’s a high probabiltity that you already know. While you have the money, take a portion of your tax refund and invest in repairing your credit. Pay to have it professionally repaired because if you were going to do it or knew how to do it already, you would have already fixed what you are ashamed of. In the long run the benefits of an excellent credit score far outweigh the cost of the investment in credit repair. To learn more about the AI driven credit repair platform I use with my credit coaching clients go here.
It seems like every day we learn about government employees being laid off, a business filing bankruptcy and closing its doors, or a company reducing its workforce to invest more in Artificial Intelligence. The fact is, even though there was a time when the concept of “job security” seemed promising, the reality is, “job security” never existed. If you rely on the government or a job to feed you, you are also giving them the power to starve you. You have to have a source of income that you control. That’s why I suggest, taking a portion of your tax refund and using it to start a business.
If you have high interest debt, like credit card accounts, car loans, or open personal loans pay down your balances. Make sure you apply the payment directly to the principle amount of the loan.
Decreasing the principle balanc, or paying off these accounts entirely is one way to immediately give your save a pay raise.
Instead of letting the interest eat away at your bank account, you are taking back control of your finances and positioning yourself to win against the bank.
Repeat after me: LIFE INSURANCE IS A NECESSITY!!
If you don’t have life insurance, or if you dont have enough life insurance, take a portion of your tax refund and pay for a full year of life insurance premium. That way you don’t have to worry about your policy lapsing, your family is protected, and you don’t have another payment due until next tax season!
Financial Dignity Coach and Tax Strategist