Even though I realize I’m simply getting back money I’ve loaned to the government at 0% interest, I’ll always prefer a refund over the need to make a payment.
As tax season comes to a wrap, it’s interesting to think about the ways you can use those returns. Here are my top 5.
1. Finish maxing out your IRA
The limit for most of us is $5,500 into your IRA. Hopefully you’ve been contributing all year, but if you didn’t manage to max it by December, it’s not too late! You can actually contribute to your 2015 IRA until the 15th (so you’ve got 5 days left).
2. Jumpstart your 2016 IRA
Just go ahead and get out in front of the year and max them out early. Leaves you with a lot more flexibility in 2016 and an extra 8 months to compound that investment.
3. Throw it in savings and pretend it never happened
If you aren’t quite yet in a place where you are maxing out all your investment accounts and have a fat emergency fund, this is a simple way to top it off.
4. Do some much needed home or vehicle maintenance
With out tax return this year, I’ll be doing some much needed maintenance. We have some siding that has started to crack and has some rot on it. We’ll be paying to have these boards replaced and most of the house sanded and repainted.
5. Treat yo self!
There’s nothing inherently wrong with occasionally doing something for yourself. One of the best ways to meet your goals is to have specific checkpoints and small rewards when you reach them.
If you’ve grinded your ass off all year, met all your savings goals, and you are a rockstar of saving, then reward yourself!
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