Well, today’s the big day, the day when you need to get your tax return sent in (unless you file with the IRS for an extension). And many people are already getting their tax returns back, since they sent them in early. So, what will you do if you are expecting a tax refund? Are you going on a vacation? Will you use your tax refund to finally finishing discharging that debt you racked up over the holidays? Are you even getting a tax refund (I’m not — I’m self-employed).
What you do with your tax refund depends, of course, on your personal finances, and on your financial goals. For many, that vacation is just what they need. But you can put your tax refund to good use by paying off those debts with high interest rates. Here are some other tax refund ideas that will get you on course for better personal finances:
- Open a high-yield savings account or invest in a CD (or a money market account)
- Boost your investment portfolio (wise, stable investments can put that money back to work for you)
- Infuse your retirement account (just make sure that you don’t go over the yearly limits)
- Put an extra payment on a loan principal (whether this goes toward your mortgage — recommended — or your car loan, you can reduce your overall interest charges by paying down the principal)