Do you already have plans to spend your tax rebate before you even get it? Planning on buying a new TV, cell phone, or computer? Stop and think for a minute about your financial situation before you start your shopping spree. Here are a few tips to help you be smart with your tax rebate.
Pay off credit card debt
It may be tempting to use your tax rebate on a new gadget or clothes, but it is a great way to make some headway on paying down your debt. Take a look at your credit card bills and put money toward the one with the highest interest rate.
Start an emergency fund
If you don’t have enough money saved to cover at least 3 to 6 months of living expenses, put some of your rebate in a savings account.
Make necessary repairs
If you’ve been putting off maintenance to your car or home, now is the time to make the necessary repairs. Keep you and your family safe and retain value.
Adjust your withholdings
If you are receiving a large tax rebate, it could indicate that you need to adjust your tax withholdings on your paycheck. After all, it is your money, and you could be receiving it throughout the year and gaining the benefits of additional cash flow or interest.
Invest in your future
With a little extra cash, now might be the best time to further your education if you are looking for a career switch or advancement.
Of course a little money spent on a “want” item isn’t always a bad thing, and if your tax rebate gives you extra money to indulge, go ahead and spend a little.
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Categories: Budgeting, Debt Reduction, Saving