Everyone loves tax return time? But a question we often ask ourselves is how we should spend it? It can be very easy to go online and start adding our dream wish list to the cart but that can also leave you will feelings of regret the month after. So what are good ways to spend your return? Well here we share three smart ideas to get you started:
1. Reduce your debt.
A great way to spend your tax return is to put yourself in a better financial position by reducing your debt. This means looking at your credit cards and outgoing payments. Your debt impacts your credit score which plays an important role when it comes to applying for a home loan. Start with those that have the highest interest.
2. Start an emergency fund or new savings account.
If you still have money left after reducing your debt, then set yourself up for the future by funding an emergency savings account. We can’t know what the future holds, but we can prepare ourselves in the best way possible. An emergency fund is great to have in case of emergency medical bills or loss of employment etc. You will also feel in control of your finances by knowing you have that back-up money if you ever need it.
3. Treat yourself to something small.
As mentioned, as soon as your tax return hits your bank account it is easy to want to spend, spend and spend. That is why it is important to choose one affordable item you want and purchase if yourself. This will get rid of your craving to ‘treat yourself’ as if you don’t, you will often find yourself splurging in a month or so.