Photo: Images_of_Money via Flickr
If you get a tax refund most years it’s easy to fall into the trap of thinking of that refund as a windfall and blowing it on stuff you don’t need.Instead use that money to kill a debt, bulk up your emergency fund, or invest in your future.
Personal Finance weblog Get Rich Slowly recommends that you take 5% of your tax refund and spend it on something fun, but the other 95% should go toward your plans for the future.
Perhaps this will be to pay off a smaller debt in it’s entirety, perhaps you should set aside a third or half to immediately go into your savings account, or as a capital investment to improve your career, house, or other important feature of your life.
Personally my wife and I are looking at somewhere around $3500 for our refunds this year. We plan on using around half of that to build a wooden backyard privacy fence ourselves and the other half will go to our savings. We are putting $400 away for new blinds and a couple of home office peripherals for me.
So for those of you receiving a refund of four figures or more consider using the bulk of your refund to help fund the life you’re working to achieve.
How to Spend a Tax Refund | Get Rich Slowly
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.