For many Americans getting a tax refund is an exciting moment. It’s like you’re receiving a bonus check at the start of the year. But, if you’re still deciding what to do with your tax refund, I will share smart things you can do with your money to grow your wealth in this blog.
1. Emergency fund
As humans, we all know accidents and emergencies are inevitable; however, many people don’t consider how devastating one accident or emergency can be on our finances.
For example, your car breaks down, and you need $1,000 to fix it. But you’re forced to look at things like credit cards or high-interest loans because you didn’t save up for emergencies.
You don’t want to take out loans with high-interest rates to pay for something you could have saved for in advance.
This is where your tax refund can come in. You can put half or all of it up for emergencies so that when something pops up, you’re ready.
2. Invest in your home.
Does your house need some overdue repairs? As a home owner, any repairs you make to your home can increase its overall value.
For example, you could do things like:
- Install kitchen backsplash tiles
- Replace your house door with a steel door
- Replace windows
- A wood deck addition
- Upgrade your kitchen lighting
- Fixing roof problems
When considering buying your home from you, buyers will look at these things. Even appraisers will give your house a higher rating if you make some upgrades.
Some of these upgrades are inexpensive but add incredible value to your property.
3. Pay down high-interest debt.
Debt is also one of the biggest enemies of wealth because it hurts your net worth.
Your net worth is what you own minus what you owe. It’s the total value of all your assets (house, stocks, cars, etc.) minus things you owe money on, like credit cards.
If you don’t pay off your credit cards monthly or you’re paying down loans, this is your chance to lower your debt and reduce the interest you owe.
5. Invest in the stock market
Like real estate, the stock market is one of America’s proven creators of wealth. Owning stocks in different companies can protect your money from inflation, allowing you to grow your money passively.
6. Invest in yourself
Sometimes the best investment you can make is in yourself. This includes buying books, attending seminars, buying a gym membership, or learning a new skill.
Investing in yourself can improve your abilities and increase your self-esteem. This will help you not only in your personal life but also in your career.