The Smartest Ways to Use My State Tax Refund
My state tax refund is the amount which I might receive from the state or federal government taxing authority. They will reimburse me for the amount of taxes I might have over paid in initial tax payment.
Nothing makes my day better than getting the notification that I have access to my state tax refund. Usually it is enough money to give birth to stupid ideas in my head. I immediately want to go on a shopping spree, or something similar.
Splurging is the first thing that occurs to me while thinking what to do with my state tax refund. However, there are other options available to make better use of the state tax refund in a productive way. Wasting it on momentary pleasure is all well and good, but it is not efficient.
Following are a few ideas I have researched in spending my state tax refund, that you can utilize as well;
Clear Up the Existing Debt
New credit cards have a very high interest rate. They may even go up to 16%. If you have a credit card with a high interest rate, you can clear it up in one fell swoop. This will be one of the smartest ways to spend your federal tax refund. Interest rates have a way of accumulating. A time may come when such debts become far too heavy. This way, you can clear them up before that happens.
Building an Emergency Fund
An emergency may come at any time. There is no telling of the future. No one person has a control over such circumstances. However, what they do have control over is preparation. Stashing a significant amount of cash for a rainy day becomes very valuable in an emergency. Those who have passed through similar circumstances will tell you there is nothing better than a contingency.
Filling up the Retirement Account
Every person wants to experience an easy retirement. You can certainly spend all your money and hope to God that your descendants will take care of you. But you will feel much better by proper preparation of resources. Your can use the tax refund amount to increase the retirement budget. Trust me, there is no better way to spend it.
Investing in the Stock Market
You can invest your state tax refund amount in stocks. You can either develop the existing stocks portfolio you might have, or you may build one from the scratch. A brokerage account opens up further options for the future. A financial advisor can advise you on how to invest properly.
If you already have insurance for healthcare, home and automobile; it is time to invest into other avenues. You can use this excess money to buy some other necessary form of insurance which may be beneficial to you. Umbrella Insurance is one such policy which removes many limitations for miniscule premiums. Liability insurance limits can also be significantly increased with this amount.
Creating a Savings Account
Every one has hopes and dreams. If you dream of travelling or buying your own house, then you are going to need money for it. You can only start walking down this path through the tax refund. Start a proper savings account and submit the money in it. This way you will have access to a token amount which will need building up in the future endeavors. Keep an eye on your income tax refund status to plan better.
Improving your House
By keeping an eye on state tax refund schedule, you can plan on when to improve your place of residence. You can use the money for repairs, new paint or new furniture. You can renovate your kitchen or your bathroom. You can install a few new amenities. This will not only improve your quality of life; it will also increase the value of your house.
Donating to a Charity
Not many opt for this option, but you may do so for the state tax refund 2020. Donating to a charity is not only a moral decision, it is also a practical one. By presenting the proof of your donations, you can receive exemptions or deductions in tax status in the future. If even a single child may sleep with a belly full of food because of your donation, it’s worth it.
Replacing Tools of Older Models
This option can eat money faster than you can say ‘hello’. When I did this, I asked myself, where’s my state tax refund amount? I did not realize I had spent it already. You can use the money for buying a newer model of refrigerator or microwave. You can also replace your older cell phone. Just remember to not overspent. Otherwise you will come a full circle in your spendings.
Investing in Yourself
Think beyond the momentary gratification. You can certainly spend all the money on a pair of shoes or clothes. But better option would be to improve your own portfolio of skills. You can sign up for some new courses in the local college. You can increase your efficiency and future employability. You yourself will feel better if you remake yourself better than ever before.
Being a resident of Dallas, I concern myself with the Dallas State Tax Refund. I keep an eye on all important dates and schedules. I also ensure there is a need of my own that can be satisfied through this refund. I do not waste my money for the sake of momentary frivolity. I advise you to do the same.