According of your refund is a great additional

According to Bankrate, around 54% of Americans get a tax refund every year. You may receive a tax refund if you overpaid taxes for the year or withheld more of your income. If you take advantage of tax benefits like the child tax credit, you might also receive a sizeable tax return. How a Tax Refund Can Help You Get AheadI used to get a tax refund back when I was in college since I was a single mom and low-earning student at the time and it felt great to get a check for a few thousand dollars when I had been struggling all year-round. I usually put the money into a savings account or made extra payments on my rent for the year so money wouldn’t be so tight each month. When I received a tax refund two years ago, I was happy to put $3,000 on my high-interest car loan which led to me paying it off early by the end of the year and saving so much money in interest.I’m not the only one who’s been able to use my tax refund to improve my finances either.Emily, a working mom from Illinois, says for the past few years she and her husband have used their tax refund to pay off medical bills and small credit card balances, and mostly to build up their savings account.”Nothing makes life easier than feeling like you have ‘extra’ money in the bank and no bills hanging over your head,” Emily says.Ashley, an RN Case Manager living in Michigan, says she also uses her tax refund to replenish her savings account and once used some of her refund money for a down payment on a new car. “Financing my first vehicle with tax refund money helped me build my credit when so I could be able to buy a house last year,” Ashley said.”I’ve also been saving a portion of my refund money ever since college and it easily added up to $3,000-$4,000 during those years.”Investing Your Refund MoneyWhen filing your taxes, you may see a prompt toward the end of the process that asks you if you’d like to invest some of your tax refund instead of receiving a full check or direct deposit. This is an important consideration to make since it’s best to get started with investing as early as possible in order to grow wealth. Investing a portion of your refund is a great additional way to save your money and allow it to grow over time, especially if you can’t afford to invest a lot during the year.Even if you receive your full refund amount, you can still invest on your own with an online brokerage like Fidelity, Motif, or Vanguard, or you can max out your 401(k) or IRA (individual retirement account).Candice, a graphic designer and author of The Debt Slaying Challenge: Eliminating Debt Fast, owns the blog Young Yet Wise and says she uses her tax refund to pay off debt, beef up savings, and invest in the stock market. “The biggest impact on my path to success was the year I spent $1,000 of my refund to open a brokerage account,” Candice said. “For years, I kept saying I would invest but never did. When I finally came across the extra money, I knew I didn’t have any more excuses.”When It Comes to Avoiding Temptations…Receiving a lump sum of money can tempt anyone to spend mindlessly on splurges or other non-necessities instead. It happens to all of us. Ashley has felt the temptation to spend some of her tax refund money on home improvements like new carpeting. Emily says it would be nice to spend the extra money on some new clothes or a family vacation.Yet and still, these temptations are often avoided because they don’t support the bigger picture. Candice summed it up very nicely. “I was tempted to splurge with my tax refund last year, but I knew that my money goals were more important than my instant gratifications,” she said. “I do leave a small percentage of my refund for fun purposes, that way I don’t feel deprived.”Dedicating a small amount of your return for splurges or fun ‘wants’ is a great way to balance your use of the extra money so you’re improving your finances and also spending on fun things you like as well. Do you get a tax refund? How do you plan to use it to get ahead financially?


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