If you’re expecting a tax refund, you may be licking your chops as you consider all of the ways that you could spend it. But before you commit, you should consider some words of advice from experts in the industry. Keep reading to get their best recommendations.
Wade Schlosser is the CEO and Founder of Solvable, as well as a financial online generation company. Collectively, our sites garner more than 4.3 million unique visits per year, with over $75 million in business and consumer tax debt successfully resolved from our network of advertisers.
Use at least 50% for investment
I always recommend that people use at least half of their tax refunds paying down high-interest, unsecured debt if they have any. This may include student loans, personal loans, or credit card debt.
Most people look forward to their tax refund to splurge on a treat – whether that’s a family vacation or a new 4K TV. I think it’s okay to treat yourself, even if you have debt. But at least take a step toward paying down that debt by using half your tax refund.
If you don’t have any debt, consider investing in stocks, options, or EFTs. Apps like Acorns and Robinhood make it easy for beginning investors to get started. Both apps let you invest in fractionals, or portions of stock. This helps you build a more diversified portfolio and invest in companies you believe in, even if you can’t afford a full stock share.
Bottom line: You don’t have to use your entire tax refund wisely or responsibly. It’s okay to set aside a little “fun money,” but I recommend people use at least 50% to pay down debt or make an investment.
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