Use some of the money to open a bank or credit union account. Last year an H & R Block employee told me that many taxpayers asked for their refund be placed on the H&R Block debit card because they didn’t have a bank account. I can't imagine not having a bank account and think everyone would benefit from having a checking and savings account. Tax season is a good time to open both types of accounts.
Build or start an emergency fund. Many personal finance experts mention saving $1,000. Others recommend saving one, two, or three months worth of expenses in your emergency fund. Getting a large sum of money is the perfect time to begin to build your own emergency fund.
Pay off or pay down a credit card or a debt. This is an excellent use for a large amount of cash. Paying off a credit card will save the debtor from having to pay interest on the amount of debt owed. This will also free up more cash in the following months.
Take a class that improves your job marketability. This doesn’t have to be a university or community college class, but can include job skill seminars and resume building workshops. The videos I've been watching of Ramit Sethi includes such things as building your own resume and self development programs. His videos are a wealth of information on making yourself more marketable.
Purchase the supplies that you need to organize grocery store coupons. You can purchase one of those large coupon binders, or an index card box or an accordion file. To save money use some of the supplies you already have on hand like paper clips. The cost of this project will vary depending on which method you use.
Buy some plants for your garden. Do you want to have a garden with raised beds? Having a large sum of money is the perfect time to invest in a garden. Buy fruit trees and you'll reap the benefits for years to come.
Buy a tool kit or tool box for the house. It will be easier to do minor home repairs when you have the proper tools. Doing it yourself will save you money too.
Inventory your disaster supplies. If you live in Tennessee you know the chances are good that your power will go out several times a year. Do you need to buy a hand-crank radio, cooler, generator or any other number of things to help you make it through without having to spend a small fortune.
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Great suggestions. I just sent my Aunt a new sewing machine as hers died. That is how she makes money and if she can't earn it then I get the bills, so I used some of our small return to purchase that for her.
ReplyDeleteOh, that is terrific, Kim. You really are saving money by he;ping her to earn her own income. I love that.
DeleteSMART!!!
DeleteI used my tax refund to pay extra on the mortgage, to build the home repair savings account, and a very small amount went to ‘fun money’ fund. 😊
ReplyDeleteThat is an excellent idea, Nil. I wish I had thought of it and I'm glad that you put it into the comments. I have a fun money section for mine too. That's my favorite part. LOL
DeleteUsually, mine was very small. I would buy a pair of shoes and lipstick and put the rest on the bills. Some friends wanted to spend it on fun exclusively. They lost their houses and cars because they wanted fun first.
ReplyDeleteOh wow, that is so sad. Sounds like they had their priorities out of line.
DeleteFrom my experience over the decades, an emergency fund is critical to managing debt. 6months expensee will cover car repairs, tires, broken appliances, roof leak etc. Those 'big' things that cause stress. Such a relief to write a check and not incur debt.
ReplyDeleteAfter that, kill debt! However, if there are true needs, 10% toward those first.
Excellent advice, Elle. Thank you for sharing.
DeleteFor the first time in a long time, we were able to transfer our refunds directly into savings. It was a great feeling. You listed some great ideas above.
ReplyDeleteThank you, Penny. That's terrific that you were able to transfer yours directly to savings. That must have made you feel so good. :)
DeleteUsed ours to do some much needed larger repairs on my Jeep. Though the repairs ran $1,600, being that keeps last so long, I was able to justify the cost. My husband's little Civic, though cheap to repair, is no longer adequate for our 3 growing girls so we are using half our refund to purchase a used Dodge journey with third row seating. The remaining amount I am using to take a career training course in certified medical coding and billing as my part time job is becoming too part time after the owner merged two stores, and their employees together.
ReplyDeleteOh wow, I am sorry to hear about your employment woes, Nichole. It's a great idea for you to take some more career training courses as we don't know what tomorrow holds.
DeleteCar repairs are a good thing to spend a large sum of money on because people don't always have a large sum of money to spend on car repairs. My Mom got a car last week, a 2012 Chevy Cruz for $5000.
We owe again (the way our salary is handled vs stock means we always owe, as we can't adjust the withholding for our stock), but when we receive large sums of money, we typically split it between our mortgage paydown & the boys college funds. We already have an emergency fund, so those are our next two places.
ReplyDeleteWe will f ind out Monday if we get a refund. Fingers crossed. Depending on the amount, a portion will go towards the HELOC and a portion will go into savings.
ReplyDeleteThat is great, Lisa. Keeping my fingers crossed that you get a refund!
DeleteBelinda, our government has just announced that it will be giving a one-off payment of $750 to some members of the Australian community as part of a stimulus package to try to mitigate impacts of Coronavirus on our economy. These are really good ideas for how that money could be used. Meg:)
ReplyDeleteThank you, Meg. That is wonderful that your government is doing that. $750 will definitely come in handy.
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