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The following is a Guest Post from Elise Morgan
Tax time is a great time of the year to take a pulse on your finances, analyze your money from the past year and evaluate if it is aligning with your short- and long-term goals. This is also a great time to prepare what you should be spending and investing your tax return money on, whether it be upcoming expenses, outstanding loans, or to satisfy any other spending needs you may have.
Evaluate how your tax return will be looking this year and consider these following tips on how to invest your money to benefit you later on down the road.
1. Pay Off High Interest Debt
This may not seem as exciting as an all-inclusive trip to Bali like what your friends are planning to do with their tax return, but it is certainly one of the best financial decisions that you can make. Instead of feeling constrained by the high interest rates of your debt, consider paying it down or completely off this year with your tax return to see an increase in your credit score and help to assure a promising financial future.
2. Fund A Roth IRA
Using your tax return to fund a Roth IRA is another great way to invest in a financially stable future. A Roth IRA is an individual retirement account that you can fund with after-tax money. These act very similarly to regular investment funds, except they grow tax-free.
Keep in mind that there are some limits on who can contribute and how much one can contribute to this investment, but regardless of the criteria, it is still a great way to think about the future and devote to financial permanency.
3. Invest in an Easier Way to Pay Your Bills
Spend more time doing what you love rather than staring at some numbers on your screen for hours on end. No one enjoys paying their bills, so by investing in an app that does the hard work for you by automatically bringing the bills and other important statements to you is a great way to reduce stress, clutter, and helps get your payments in on time – hassle free.
4. Invest in Your Home
This time of year is a great time to take a look into your home’s value. If there are places that you think could use some improvement or if there is an unfinished (or un-started) project you want to work on, you finally have some money to do so.
Investing in your home can range from simple and easy tasks that don’t cost much, like redoing the paint color, updating your landscaping, and changing cabinet handles and other fixtures. Or you can tackle some bigger projects to really increase the value of your home, such as new kitchen/bathroom countertops, updating your hardwood floors, or even investing in new appliances.
By investing in your home with your tax return, you’re not only increasing its value but you’re also making it an even more enjoyable and comfortable living space.
5. Invest in Yourself
A little investment in yourself this year can go a long way. Take care of your health by finding a skin care routine that is tailored to you, sign up for some fitness classes that fit within your schedule or even find the right accessories to help you get better sleep and wake up feeling well-rested, because if you’re like the rest of us, some extra Z’s are definitely needed.
It doesn’t have to be much but putting a little bit of effort into making you the best possible person can be just as important as your financial performance.
6. Donate to Charity
Donating to charity is a great way to use your tax refund, as it is an opportunity to provide for a cause that is close to your heart while also giving you the opportunity for larger deductions next year. Sharing your wealth with those that are less fortunate is an important aspect of good money management and can improve the lives of numerous individuals, which can feel just as great as investing in yourself and your own financials.