Perhaps now is the time to make that big change in your life that you’ve considered for some time – your tax refund can help you achieve it.
By: John Gower
Are you expecting a significant refund from your income tax this year, but don’t know what to spend it on? If so, you may want to take these ideas into consideration.
Take a week-long vacation
If you are in a stable financial position and can afford the luxury of traveling, then you should take advantage of the option to do so. Relive some stress, get your mind off work, and have some fun with the family on a sunny beach or high class resort. Enjoy your money and reward yourself for having earned it. You can find many deals on cruises and getaways to exotic places around this time a year, and many are for a seven-night stay. A change in scenery can be refreshing and therapeutic, so book the flight while you still can.
Donate to charity
Supporting a cause that you care about, or one that has symbolic meaning in your life, can be a great experience. Not to mention that, sentiment aside, if you donate to a qualified organization you could also get a tax deduction. Charitable tax deductions allow you to pay taxes on the amount of income you would have minus what you donated. For example, if you made $30,000 in a year and donated $2,000 then you would only have to pay taxes on $28,000 for that year. If this is something you may be interested in, consider contacting your local charities to find out which organizations are qualified for tax-deductible donations.
Take a Class
If you want to learn a new skill, try taking an affordable class at a local college or university. Courses are frequently offered online, depending on the subject and can cover anything from cooking to auto repair. Your tax refund can help pay for this opportunity to refresh your skills or disciplines.
If you don’t care about the course credits, some colleges and universities will offer classes for free. However, those considering attending college full-time who are still unsure about the economics of a college education can test the waters first with a basic course or two. Taking a class can help you get an idea of what college is like and if it is right for you or not.
Pay off high-interest loans
Admittedly, paying off debt does not sound like much fun. However, take into consideration the real fun you could have after it is paid off. Without debt weighing down your finances, you’ll be free to save up more income and improve your credit. Paying off credit cards or small debt that you may have racked up is one of the smartest choices you could make, and it could also end up being one of the most rewarding.
Use your tax-time “bonus” to go to a spa, buy some clothes at the mall, purchase a gym membership and generally invest in yourself both physically and mentally. Getting your mind in the right place can help to boost confidence in all aspects of your life, so take advantage of the many services that can help you make intellectual and emotional gains. For example, consider taking a yoga glass or hiring a personal trainer.
Finally take the opportunity to do what you’ve been putting off due to the cost. Perhaps now is the time to make that big change in your life that you’ve considered for some time – your tax refund can help you achieve it.
About the Author:
John Gower is a staff writer for NerdWallet, a personal finance website dedicated to helping consumers compare cd rates, find free checking accounts and more.