If you have received a tax refund or expecting a refund check, you are not alone. Last month, the IRS reported paying more than $142 billion in tax refunds, with the number expected to rise. Moreover, while the money is only a return of withholdings you may have paid throughout the year, here are five useful things you should do with your hard earned cash:
Pay down debt If you are carrying high-interest credit card debt (or debts that are high in fees), now is the time to do something about it. Paying off debt not only reduces your overall liability, but it can also increase your credit score. There is a great app, Credit Wise that can help you determine if you pay off so much, the impact it will have on your credit score.
Create a financial disaster savings We are just less than two months away from the start of Hurricane Season. This is a great time to start thinking about stashing some cash away in case of an emergency. Consider locating high yield savings account online that you can utilize for your financial disaster savings account. Check out Bankrate.com for a great listing that can help meet your needs.
Invest in yourself I often share the story shortly after Hurricane Katrina. While I had lost everything, the one thing I did not lose was my human capital, which is your skills and knowledge. Take time to invest in yourself, learn more, educate yourself and build your experience. It will always pay you dividends.
Build wealth for future generations Start a college savings plan for a young person in your family. I speak about the Start Savings 529 Plan here in Louisiana and while this is a great place to start, consider exploring all options. However, the great thing about this plan allows you to save money for your child’s education matches your contribution based on your income and provides a state tax deduction.
Bless others Lastly, consider being a blessing to others. Donate to a charity or organization that you love. Know that it is a blessing to be a blessing!
Kemberley Washington, CPA, @kemcents is an author, business owner and financial news contributor. She has written several books, which includes The Ten Commandments to a Financial Healing and 21 Days of Powerful Breakthroughs. She is the owner of Washington CPA Services, LLC and contributes to many media and news outlets. Follow her on social media, anywhere at @kemcents!