Day #248: 5 Ways to Use Your Income Tax Refund

This guest post is from Eugene who is the owner and primary writer for StoopidSucess.com. Stoopidsuccess.com was established in August 2010 and is a blog intended to help people achieve success in their personal, professional, and financial lives. 

With the Spring 2011 semester well in full swing most should have received their refund checks from their respective universities, but often times are not sure of the proper what to make use of this money. For starters, the refund check is a check or payment the college/university you attend writes out to you because you have more money than is needed to cover your expense to attend the college/university. While the refund check may not be income you earned, it is still earned income and must be treated as such. I will provide 5 tips on making proper use of the refund check.

1. Buff up your savings
The very first thing you should do when you receive your refund check is buff up your personal savings. This will be both your safety net while attending college. There may be a time when money gets rather scarce while you are in college, but you will have the safety and security of knowing that you have a nice safety net if ever you should need it.

2. Make some wise investments
One of the best ways to both have your money work for you and grow your personal net worth is to make wise investments while you are young. These investments may be in Bonds, Stocks, or even Mutual Funds. The key is to invest in something that you both understand and has pretty good growth potential. Investments should be made for the long haul, rather than quick short-term gains.

3. Spend it on you!
That is correct! I am telling you to spend some money. The key here is that you are budgeting your spending. You should spend no more than 15% of your refund check on you though. Spend it on whatever you want. There is no point to getting a large sum of money, and not being able to make yourself feel good about it. Just make sure you spend it wisely, because its not often you get money that you didn’t have to earn.

4. Give to charities/causes you believe in
Helping others is one of the best ways you can possibly leave a lasting mark on the world. Hey even the government realizes this and encourages it. I believe in helping others, and often times set aside 10% of my income earned and unearned to give away to some of the charities and causes I believe in.

5. Pay down debt
This is the good part. Trust me when I say this, there is nothing better than a life free from debt. You can have the peace of mind knowing that you do not owe anything to anybody. I would suggest you take upwards of 25% of your refund check and pay down your debt. The average college student carries at least $1000 in credit card debt. The amount of money you will save and stress you will avoid will be worth it in the end for the amount of money you were willing to set aside to eliminate your debt.

 

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