Quantcast

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

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

Finance

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

Shutterstock

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

Shutterstock

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

Shutterstock

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

Before Naturi Naughton captured audiences as Tasha in Power and even before she played Lil Kim in the Biggie Smalls biopic Notorious, the actress was in the girl group 3LW. The group 3LW, which stood for 3 Little Women, composed of Naturi, The Real's Adrienne Bailon and BET Presents: The Encore's Kiely Williams, and they had many hits including "No More (Baby I'ma Do Right)" and "I Do (Wanna Get Close To You)."

Keep reading... Show less
The daily empowerment fix you need.
Make things inbox official.

Have you been prioritizing the needs of others over your own? Feeling stretched thin as a result? This month's Full Moon in Aries will ensure that you start putting yourself first. It's about time, Queen! Deep down you know it's overdue. In astrology, the Full Moon is a period of reckoning, manifestation and culmination. You are likely to find yourself on a fast track to resolution or closure when it comes to the people, relationships and situations that have been putting an unnecessary strain on your mind, body and spirit.

Keep reading... Show less

Ever since Chlöe and her sister Halle Bailey have been creating their own identities outside of their group Chloe x Halle, Chlöe has faced Beyoncé comparisons. Modeling her performance style after Beyoncé is no surprise since both Chlöe and Halle are signed to the "Formation" artist's label Parkwood Entertainment and so there's no doubt Queen Bey has influenced them in more ways than one.

Keep reading... Show less

While it's important that we're always proactive about taking care of our immune system, if there is any time of year when we tend to think about it more than usual, it's right when the fall season arrives. Cold weather has something to do with it. Cold and flu cases spiking have something to do with it. Wanting to make sure that we stay well enough so that we can enjoy some holiday time off probably plays a role in it too. And while things like rest, exercise and not smoking all help to keep our immune system healthy and strong, it's important to know how much diet plays a part in all of this too.

Keep reading... Show less

Y'all. Y'ALL. A couple of weeks ago, I decided to get a humidifier (which is basically an electronic device that helps to put humidity into the air). The main reason why is because I read an article that said that COVID thrives in low humidity. I'll get into that in a second, though. Anyway, what I thought was going to be a quick trip up the street ended up being a day-long endeavor because I had to go to four different stores and all of them had inventory issues. Most said it was because of the labor shortage that's been happening all over the country.

Keep reading... Show less
Exclusive Interviews

Adrienne Bailon Wants Women Of Color To Take Self-Inventory In Order To Redefine Success

"You can't expect anyone else to care about yourself like you do."

Latest Posts