Got a Tax Refund due in 2020? Here’s 6 ways to spend it wisely
and maybe even make more money.
Are you expecting a tax refund in 2020? Although you deserve to spend it any way you want, you might want to do it wisely. Treat it as an investment that should provide you with returns at some point in the future. Experts suggest that a tax refund should be treated the same way you treat your pay packet. But you are allowed to make allowances with your tax refund money.
Smart things to do with your tax refund in 2020
1. Take a course
A great return on investment for your tax refund is knowledge, which you will gain from enrolling a course that will help in your career, improve your chances of being promoted, or provide you with another income stream. Teaching English as a foreign language, for example, could prove lucrative. You can also enrol in business classes in case you want to become your own boss in the future.
2. Book an adventure tour
Going on an adventure tour may seem like a waste of money, but the experience and discoveries you’ll gain from one are priceless. It’s the kind of ROI that will be with you for the rest of your life. Taking a break from work and traveling will also refresh and rejuvenate your mind, preparing you for the challenge ahead. Check out companies such as Travel Talk Tours, Contiki or Encounters Travel and see what they have to offer for
your next adventure trip.
3. Put your tax rebate into a high-interest savings
If you want to grow your tax refund, putting it into a high interest savings account will do just that. A good example is Cash-ISA that lets you earn a tax-free interest. Whether you hold cash as is, as an investment or an Innovative Finance ISA, you can cash out your savings and put it back within the same year without making an impact on your annual allowance. Other options include easy access account and notice accounts.
4. Invest it in stocks
If you want to save and earn for the long-term, investing your
tax return in stocks is a great option. This is especially true if you choose stocks that pay dividends. Although there are risks involved, you can stay safe if you diversify your financial portfolio. You can also choose to trade stocks, if you enjoy playing in the stock market.
5. Pay off debts
Do you have unpaid loans or a mortgage? Use your tax back to make repayments, especially with high-interest debts. The sooner you lessen the principal balance, the lower your payment amounts will be, depending on the loan terms. Wouldn’t you want to take a breather from paying money you owe?
6. Start an emergency fund
Failure to prepare for emergencies can lead to a financial disaster. Without an emergency fund, a surprise major expense would force you to borrow money, regardless of the high interest. This is why financial experts highly recommend that you have at least 6 to 8 months’ worth of savings in an account that earns interest and is easily accessible.
It is your prerogative how you spend your tax refund. But don’t be that person who had money one day and had no money the next.