6 Smart Ways To Invest Your Tax Return Instead Of Blowing It

6 Smart Ways To Invest Your Tax Return Instead Of Blowing It

An influx of money doesn't mean you gotta spend it.


In 2019, the average tax refund was $2,869, which is almost an entire month of income for many Americans. A sudden influx of cash makes it so tempting to splurge, but does that align with your long-term financial goals? As savvy responsible women, we have options besides breaking the bank on a new pair of heels, a lavish vacay, or a designer purse.

Have you thought about how you will use your lump sum of money this year? It's not too late to make smart financial decisions. If you want to invest in your future, then learn the best ways to invest your tax return instead of blowing through it.

Start Or Grow A Business


You may be a founder or thinking about becoming a founder. Either way, an investment in something that's all yours is a great way to spend your tax return. In 2019, there were 30.7 million small businesses in the U.S and nearly 80% of those businesses employ only the founder. Business is booming! Instead of spending your money on material things that give you instant gratification, use your tax return to start or grow a business that helps you in the long-term.

The majority of businesses are started using personal savings. You never know what could happen. You could turn your tax return into a profitable business that pays for the luxuries you didn't splurge on this year.

Create Or Expand An Emergency Fund

If you haven't created an emergency nest egg, then this is the perfect opportunity to finally create one. You don't have to dedicate all of your tax return to an emergency fund, but it would be smart to dedicate at least a small portion. If you already have an emergency fund, it doesn't hurt to expand because emergencies are truly unpredictable. It's better to be safe than sorry.

Invest in Career-Building Certifications Or Continuing Education


The most successful business leaders in the world all have different paths, but they tend to agree on one thing. Learning is key. When the average person has 10 jobs by age 40 it's easy to understand why highly accomplished people preach the importance of staying competitive by continuing your education. This doesn't mean you have to run to the nearest university and spend a ton of cash. Continuing your education is as simple as taking an online class, buying helpful books, or gaining a certification. Whichever method helps you to acquire knowledge to better yourself. Whether it's for financial gain or to fulfill a passion of yours.

Leave Your Debt Behind

Paying off your current debt is a fantastic way to spend your extra cash, especially if your interest rates are sky-high. The less debt you have, the less accrued interest.

This is the perfect time to pay off existing credit card debt, especially debt that you acquired in anticipation of tax season. Or, contact your student loan servicer to make an extra student loan payment. Ditch the monthly minimum this month, so you save money in interest costs. Just make sure to prioritize debt with the highest interest rates.

Invest In Valuable Stocks


Investing your money now could potentially make you rich in the future! According to an analysis by Rubicoin (digital educational investment platform), had a person invested the average tax refund of $3000 in Netflix, Apple, and Amazon over 10 years, then their $30,000 investment would have turned into $220,000! Now that's a good return on your investment.

Just think, with the proper research and strategic investment decisions, that could be you. Stock ownership is a great source of passive income. Make money while you sleep! Investing in stocks is perfect for someone who isn't scared of taking on risks to potentially reap the benefits in the future.

Save To Buy A Home Or Increase Home Equity

If you want to leave behind the days of renting or living at home, use your tax return towards a down payment on a house. Start the journey towards saving enough money to cover a down payment and closing costs for your home. Next year, you could be sitting in your very own place decorated to your liking!

If you already own a home, then use the extra cash to increase your home equity. You can make extra mortgage payments or make a direct payment to the principal. Paying down housing debt can help to lower interest expenses over the length of the loan. The more home equity you have, the less you owe while gaining more value in your home. Unlike many other forms of debt.

Want more stories like this? Sign up for our newsletter here to receive our latest articles and news straight to your inbox.

Featured image by Shutterstock

6 Items NYC's Most Stylish Can’t Wait To Wear This Fall

This year I had the pleasure of attending my very first New York Fashion Week where I witnessed the best of fashion both on and off the runway. In between highly anticipated shows and jam-packed schedules industry insiders dominated the street style scene making their very own impression on the world. Buyers to bloggers, editors, and stylists were captured serving one-of-a-kind looks that will forever live in Fashion Week history.

Keep reading...Show less
The daily empowerment fix you need.
Make things inbox official.
KevOnStage And His Wife Melissa Don’t Want To Be “Relationship Goals”

Being married or in any type of long-term relationship takes intention and diligence. No one could tell you that better than comedian and social media personality KevOnStage (Kevin Fredericks) and his wife and partner Melissa.

Keep reading...Show less
From Love & Basketball to The Woman King, The Evolution of Gina Prince-Bythewood

Of all the joys that came from my recent viewing of The Woman King in theaters, my favorite was simply watching another one of Gina Prince Bythewood’s visions brought to life. Since 2000 when she came on to the scene with her sports romantic drama Love and Basketball, Bythewood has built a diverse filmography that centers Black women.

Keep reading...Show less
Bags Secured: How Tia Mowry Continues To Make Money Moves Outside Of Acting

After 25 + years in the entertainment industry, Tia Mowry has remained a mainstay in many of our lives. Tia and her twin sister Tamera garnered fame after starring in their own TV series Sister, Sister, which premiered in 1994 and since then we have seen them venture into solo endeavors. Tia, specifically, went on to act in the film Baggage Claim, Netflix’s series Family Reunion, and who can forget her role as Melanie Barnett in The Game?

Keep reading...Show less
5 Ways To Keep It Together On A Stressful Work Day

Stress is a common part of living, especially when it comes to work. For women, the impact can be felt even more due to workplace issues including unequal pay, gender discrimination, and race-related aggressions. In fact, research shows that professional women experience more stress than men, with a 46% prevalence for those employed full-time (versus 42% for men).

Keep reading...Show less
Exclusive Interviews
Latest Posts