Tax Day is now just two weeks away and the average return is about $2,500. It’s tempting to just spend it, but before you do, here are some ideas to make the most of your money.
Before you go crazy shopping or spending it on something extravagant, press the pause button. Think about all the things you could do with it, like pay off, or pay down, your debt to create financial freedom and create financial flexibility.
Investment adviser Patrick Lynch said, “If you don’t have credit card debt, you may want to go out and establish an emergency fund. Emergency cash fund for those times you don’t have to put it on the credit card.”
It's estimated only 4 out of 10 people have enough savings to cover a $1,000 emergency.
Lynch said another option is to start a 529 college plan for your children or grandchildren. For less than $50, you can start a 529 plan and give others the option to join you in putting away money to help your loved one go to college.
Lynch also said, “If your debt is eliminated and you get $2,500 back, spend part of it. Might you give some to charity and makes you feel pretty good and it’s a good karma thing.”
In the end, Lynch said if you want to splurge on yourself, only spend half of your return, and save the rest.