How to Use Your Tax Refund to Make More Money and Save Money
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3/20/24
Many working people look forward to getting a tax refund to splurge at the mall or plan a vacation. However, a better use of the money is to make small changes to elevate your everyday life, and/or let that tax refund earn more money for you! Do not spend your tax refund frivolously, to have nothing substantial to show for it. Instead of wasting it on entertainment experiences, use it to elevate your everyday life! Hold onto your refund until you can figure out a way for it to make the most impact for you! Whenever you get an income tax refund of any substantial amount ($1,000 or more), think of it as a once in a lifetime opportunity to advance your life. You can do a lot with a thousand dollars or more. Use your refund to create a passive income, strategically tackle debt to increase your take-home income, or improve your home conditions.
Here are a few ideas to get money relief, and even earn money. 1. RESERVES FOR EMERGENCIES. If you do not have adequate savings for emergencies, saving your tax refund to build a reserve is a must! This way, when you have unexpected expenses, you will not have to pay excessive fines and fees, which cost you money and set you back. Having extra money in the bank can relieve stress and give you peace-of-mind. And putting your refund in a high-interest bearing FDIC-insured account, can earn you free money in interest! 2. SAVE MONEY ON GROCERIES. Many people forget to use their tax refund for everyday items that can make their life easier for months. Use a portion of your tax refund to purchase food staples when items are on sale, instead of buying only for a week, at a time. Get ahead of the grocery game and save money by using your tax refund money to buy quantities of foods on sale. Buying in bulk or buying in quantities (of 3 or 4) can save money, especially for non-perishables, cleaning supplies, paper products and toiletries. While this may not seem exciting, it can be satisfying whenever you save money on groceries. You can save time and money, if you don’t have to go to the store every week. 3. LEARN SOMETHING NEW. Use a tax refund to take courses to learn something new—such as coding, a foreign language, a musical instrument, a trade or skill, etc. A new skill could come in handy for earning more money at your current job, a future position, a second job, or a small business. Consider online courses that might be less expensive, that allow you to learn at your leisure. 4. PAY BILLS. If you have emergency reserves, you then want to pay off bills, in a way that will free up money in your pay check, so you feel like you got a raise. If you can’t get significant relief by paying off your bills, you want to start bringing in more money by creating passive income, working a side job or starting a small business. 5. START A SMALL BUSINESS. Use your tax refund to start a side hustle or small business, to supplement your day job, and possibly turn it into a full-time business, to make more than an hourly wage. If you don’t have an idea for a small business currently, save your tax refund (in a high-interest bearing FDIC-insured account) until you think of a viable idea to start a business. A workable idea will be something you have knowledge of and something you love to do. In addition, it will be a business idea you can start on a small scale. If you love to cook, opening a restaurant is not feasible, but catering small gatherings on the weekend could be. Create passive income. Use your refund to create passive income (income you generate by creating a product to sell, and then putting it on an automatic platform to sell it and generate income), such as design artistic or witty t-shirts to sell on Zazzle, or create a planner to sell on Etsy or Canva. 
6. PAY AN EXTRA MORTGAGE PAYMENT, but apply to the PRINCIPLE-ONLY. Using your tax refund to pay down your mortgage principle can save you tens of thousands of dollars, over the years! If you pay an extra payment every year, applying it to your principle, you can reduce your loan by approximately half the time. A 30-year mortgage can be reduced to approximately 15 years. Check with your mortgage company to see if, and how, you can reduce your mortgage by principle-only payments.
7. SELL PRODUCTS. Use your tax refund to buy discounted or wholesale inventory to re-sell, for a profit. Having a small business, from a hobby or interest, also creates additional tax deductions. Sell products that you can determine will sell. Also, sell products you would purchase yourself, so you can get discounts and save money. Become an expert in the products you want to sell, and market the products by being the expert online, on YouTube.com, Instagram.com or your own blog. 8. DOWN PAYMENT FOR A HOUSE. If you have an emergency fund and your bills are low, you may want to save your tax refunds for a down payment on a house. Money saved from tax refunds can be ideal for a downpayment on a house! 9. A NEW CAR. Use your tax refund towards the purchase of a car, if needed to get to work, and to engage in more opportunities overall in life. A car can allow you the ability to get to a second job or allow a safer (door-to-door) transportation to take college classes at night. And electric cars can bypass high gasoline prices. 10. PURCHASE SMALL THINGS THAT CAN SAVE TIME IN YOUR DAILY LIFE. One item that can save you time in multi-tasking is The Home Organizer. It can help you organize a wealth of information to maintain your household finances and important family information, from paying bills and saving money, to organizing digital logins and preserving favorite family recipes. For more information, go to My Home Organizer. Use your tax refund to improve the quality of your life, whether you use it to start a small business or build an emergency fund, purchase extra food staples and buy an organizer to budget and save money, all year. ©VC Edwards 2024, All rights reserved. 
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