It’s about that time of the year when people start daydreaming of all the plans they have for their coming tax return. Online shopping sprees and big ticket purchases are all of a sudden well within reach and top of mind, right? Wrong. Very wrong.
As tempting as it might be to plan the splurge, there are a few more practical purchases that you might want to prioritize over that all inclusive vacay. I know, I know, I’m no fun. Humour me. It might be worth it.
1. Save it. Invest it.
Think about your long term goals and put your money in a dedicated account or investment vehicle that will put that goal into forward motion. Maybe it’s your dream car next year or a new house. Putting this money towards a bigger purchase makes those big dreams that much closer to being a reality.
2. Pay off your debt.
A new pair of shoes won’t help you walk away from that student loan any faster, but putting that refund towards debt repayment might. If you’ve got a lot of debt and can’t decide which to pay off first, start with the ones with the highest interest rates (usually your credit cards).
3. Invest in yourself.
If you’ve been thinking of taking your career to the next level, or starting that side business that might just change your whole life, do something about it and invest in yourself. Use your refund to incorporate a company, invest in some inventory, or enrol in a business course. Expanding your knowledge and skill sets is never a bad investment.
Once you’ve done such a great job with being responsible with your refund, you can treat yourself with a little spoilage! Get a manicure, get your hair done, go for a nice dinner or a weekend away! Just keep things in perspective. A windfall of cash goes a lot further if it’s spent in the right areas.