If you got $3,000 dollars in the mail, what would you do with it?
Well, for the average American, that’s a question many will have to figure out the answer to very soon (if they haven’t already). CNNMoney reports that the average tax refund in 2011 is $3,129.
Now I don’t know about you, but $3,000 is a lot of money to me, and lots of money deserves a plan to make sure you maximize it.
- Debt – I would suggest using a portion of it to pay down current debt. Like those Christmas gifts that are preventing you and your credit card company from being BFFs again. Give the credit card company a little extra, if you can’t pay it off with one payment.
- Savings – I know it could be tough to save your entire tax refund. I don’t expect you to save it all, but saving a portion of it would make a lot of cents (pun intended).
- Investing – I won’t even try to provide investing tips here because I don’t know much about that. But whether it’s putting something in your retirement plan or another type of tax-advantaged savings, plan for the day you plan to retire.
- Enjoy – It’s rare that you will hear “have fun” on a financial wellness site like this. But let’s be realistic, you will spend money on yourself whether I tell you to or not. If you wait ‘til after you have done steps 1-3 first, I guarantee you’ll feel better about it.
What plans do you have for your tax refund this year?
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