Are you expecting a large tax refund? Why not use it to service your debt? Better yet, why not use it to avoid debt entirely?
Here are some ways you can use your tax refund for debt modification, consolidation and relief efforts.
Buy something useful. You can use the money to buy appliances that can cost you less in the long run, perhaps even take advantage of the “Cash for Appliances” or “Cash for Refrigerators” programs, if they are still applicable in your state. You can also use it to improve your home’s energy efficiency, and still get a refund on part of the costs.
Use it as extra funds for your monthly budget. You can divide the refund into a monthly addition to your budget. These days, anything that can improve what you can put on the table, figuratively and literally, is very welcome.
Go back to school. If you think that you will have more job opportunities with some more skills under your belt, you can use your tax refund to go back to school through online courses.
Use it for your retirement. You can set up a retirement fund with your annual tax refund, so you will have less to worry about when you do retire.
Use it for healthcare. Alternatively, you can use it for your healthcare coverage. You can even look around for a multi-coverage plan, and you can end up with coverage for both retirement and healthcare.
Put the cash in a “safety” account. If there’s some money left after your debt payments, then you should put it in your bank account, or in a special account meant for emergencies. You can later use some of the money for something else when you reach a self-imposed limit.
Pay your debts directly. Admittedly, it’s not exciting to think about your refund being used to pay debts. But this is the most important use for a refund. The faster you pay your debt, the better off you will be in the coming year. This applies to credit card debt and mortgage concerns in particular.
Sign up on the box at the right for more options about your tax refund, debt modification and relief.
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