One of the few rewards of doing your taxes is anticipating a little cash back. A majority of tax returns will receive a refund check this year. If you’re one of them, be sure to make the most of it.
[Updated info: Looks like more of us will splurge when we get our refund check this year, according to a new survey by the National Retail Federation. Survey says: 13.2% will spend their refund on a big-ticket item, up from 12.5% last year. Still, the NRF survey found that more people will also put their refunds away for a rainy day (42.1% vs. 40.3% in 2010).]
Last year, the average refund was about $3,000. That’s a nice windfall. But before you go on that shopping spree, consider spending the money on things that will give you the biggest bang for your buck. Here are three of them from Bankrate.com:
- Add it to your rainy day fund. Financial experts suggest you create a cash cushion that would get you by anywhere from three to nine months.
- Use that refund to pay off some debt. Those minimum payments on credit cards can really add up in interest charges.
- Pad your retirement account. The 401K generation is beginning to retire, and government data reveals that they have less than a quarter of what’s need to maintain their standard of living in retirement.
You’ve paid your debt to Uncle Sam, so if you get some money back as a tax refund, be sure to make the most of it.
Click here for more smart ways to spend you tax refund.
How will you spend your tax refund this year?