It’s that season.. Where people start buying things for no reasonnn! Ay! lol Alright, let me stop. I hope you read that in your City Girl voice. It’s that time of the year where some receive their tax refund check and before you think of going shopping or splurging your extra cash, let me give you the best ways to use your tax refund money!

1. Pay Down Any Debt You May Have

Honestly, if you have massive credit card debt you shouldn’t be using any credit cards at all! The problem there is that massive credit card debt= no money management. You shouldn’t be using your credit card for everyday things and you also shouldn’t go on shopping sprees you cannot afford. What I mean is, do not continue using a credit card if it has a balance higher than 30% already. If you can’t buy it twice then do not swipe! You should NEVER max out your credit card, not even if you can pay it back in full by the due date. You want to always stay under that 30% credit utilization rate.

Paying down your debt helps lower your debt-to-income ratio. I like to use the snow ball method to eliminate my debt. Focusing on paying off my smaller debt first while paying the minimum payment on my bigger debt accounts helps me pay off my debt faster. Once I’ve completed paying off the smaller accounts, I can focus on the bigger debt account and begin working on paying this account sooner and in full.

2. Create An Emergency Fund

Sometimes things happen that are completely out of our hands. A few months ago I got pulled over by the police and learned I’ve been driving with a suspended license for an ENTIRE YEAR!! Not only was my license suspended, my car registration had been expired for two months!

The officer said.. “I’m suppose to take you to jail!” I’m like JAIL!!!? *Look at GIF* I was shaking in my boots! I didn’t know what he was going to do. Fast forward, I went to court and was able to get the prosecutor to drop the driving with a suspended license ticket (I paid the restoration fee $100-NJ the day I found out my license was suspended) and plead guilty to driving with an unregistered vehicle. Everything came up to almost a little over $200.00 after the first ticket was dropped. Thanks to my emergency savings, my usual funds and monthly bills weren’t affected.

Having a minimum of $1,000.00 for emergency purposes would be ideal. Using your tax refund money would be the best time to start your fund and then continue to add to the account with time, the goal is to have at least 3-6 months worth of expenses in your emergency fund.

3. Invest Your Money

You’ve probably heard this before or thought of doing it but didn’t actually do it. Make this year the year you begin to invest! If you don’t have a clue where to begin, start with your current bank. See if your bank has accounts that can help you invest in stocks or mutual funds. I personally invest with Investors Bank, I have a Financial professional who guides me through every step and explains all stock market movements that is happening with my stocks/shares. They currently don’t have an app but the website is user-friendly and very informative. You can also go with the option of letting a robo-advisor invest your money for you. Robo-advisors pretty much make investing as easy as possible for you. You do not have to have prior investment experience to use this app, it’s built to keep track of all your investments and give you the necessary knowledge to continue with the stocks you’ve invested in. Overtime, the stock market has actually delivered more returns than savings accounts but the returns with stock markets are never guaranteed.

Robo-Advisor Apps

1. Ally Invest

2. Wealthfront

3. M1 Finance

Different Ways to Invest Your Money

1. Roth IRA (Individual Retirement Account)***

2. 401(k)**

3. Bonds

4. Mutual Funds

5. C.D.’s (Certificates of Deposit)

6.Stocks/Shares

4. Invest In Yourself

Another great thing to do with your refund check is investing in yourself. Take a class or a workshop that can help you make passive income. I would invest in a real estate course. Maybe you want to hire a business or a career coach to help you organize “your life” or career. You can even begin a side hustle, using your refund check can give you an advantage to purchase everything you may need to begin your side hustle for more income. Boost your health and wellness, if you have not visited a doctor or dentist within the last six months for no health insurance reasons, use this money to get a physical or a teeth cleaning. Invest in yourself because you can afford it, trust me!

5. Put It Towards A Major Savings Goal

If you’re all caught up on your credit cards, have no major debt, invested your money, you should put your money towards a major savings goal like buying a house or going on a family vacation. Putting your tax refund money towards a major goal can help you reach a goal sooner, even if you put half of the check towards your major saving goal it will still give you an advantage to getting closer to whatever your goal is. Sometimes when I reach my goal sooner than expected, I change the goal amount to save even more money within the time frame I had given myself originally.

6. Treat Yourself

Of course you should want to treat yourself! Just be smart about it, don’t spend your entire check treating yourself without doing at least 2 of the 5 listed above. If you don’t then you’re just cheating yourself. A few things I’d treat myself too would be a new living room set or a bedroom set, a vacation, maybe some new pots and a Robot mop/steamer. hehe.. I actually am going to Target to buy some new pots after I finish this post. Remember spending your money wisely is treating yourself, NOT spending the money at all and investing is treating yourself. Putting it towards a savings account or paying off a major debt that was lingering, such as student loans, is treating yourself. Don’t cheat yourself, treat yourself.

Crystal Gem*

Before I let you go, let me tell you the truth.. A tax refund check honestly isn’t all that! It’s extra tax money you paid to the government or should I say let the government borrow and they’re just returning it later with NO INTEREST. Actually, The tax law, The Tax Cuts And Jobs Act, lowered individual income tax rates, roughly doubled the standard deduction, and limited itemized deductions in 2017. Meaning you’re losing even more money than if you would have just received that extra money every two weeks in your paycheck and invested it. Check out the video below to get a better understanding.

*I do not own the rights to this video*

Video by: Washington Post

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