Getting a Tax Refund? Read This Before You Spend It!

Taxes are done and you are receiving a refund!  Before you go on a shopping spree read the below suggestions for using that refund!

1. Do you have an emergency fund? This is a must to start on the road to financial fitness.  Depending on your situation – try and start with at least $100 in your emergency fund, but if you can stash away $500 or $1,000 that would be ideal.  You want to put this cash somewhere that is easily accessible, like a saving account for example, so that you can grab it when you have a true emergency.  (And no – that new designer purse is NOT an emergency).  This money should be used for expenses such as car repairs, medical emergencies, etc.  Keep in mind that if you have to use any funds from the emergency fund, replace it as soon as you can!  This will keep you from breaking your budget or using credit cards to pay for emergencies.  If you want more information on creating an emergency fund, Dave Ramsey’s book,
   

   Total Money Makeover, is a great book to read to learn more.

   click on link above to order book

2. Reward Yourself! I know. I know.  As a responsible mom, you feel guilty for buying anything for yourself.  But you should!  You work hard! You take care of your family often at the expense of taking care of yourself!  So you deserve to be pampered a bit.  Go out and schedule a pedicure, a massage, or a hair appointment.  Or if you have been neglecting your wardrobe, go out and buy a nice pair of slacks and a couple of sensible blouses to match.  Looking good always boosts my mood and confidence. Whatever you decide to do – just do it!!!  You deserve it!

3. Take your family out for a nice dinner or a family fun night! Bonding with my family is important to me. My family has a pretty tight budget and do not always get to go out and experience dinners or activities that we do not work into our budget beforehand.  You will be the coolest mom ever if you surprise your family with a dinner at you all’s favorite restaurant or taking them to the local yogurt shop and letting them all get the biggest cup to fill up with their favorite flavors and toppings! (of course they will only eat 1/3 of it, but it’s the mommy points you are going for).

4. Pay down debt! The next thing you should consider doing with your refund is paying down debt. If you have any debt looming over your head, paying them off will relieve the anxiety of having a bill that you have to monitor and pay each month. I like to pay off my smallest balance debts first.  This gives me the feeling of accomplishment because I can mark that debt off of my to do list.  If all of your debts are about equal in amount, then you should pay extra on the one that has the highest interest rate or any that may be past due.

5. Build your savings! If you are debt free!  Congratulations!!  You should now focus on building your savings.  Ideally, you want to build enough cash in your savings to cover your living expenses for 6 to 9 months – should you lose your job. Having this will ease your mind and also give you flexibility if you should be without that steady income for that time period.

6. Invest! If all of the above are taken care of, then you should consider investing for your future retirement!  Contact a financial advisor and receive a free consultation regarding the best options of investment for a more comfortable retirement!  Work an amount into your monthly budget to contribute to your investment so that it will continue to grow until you need it.