Top 5 Reasons to Avoid Bankruptcy in Illinois and Opt for Debt Settlement Using Benveniste Law Offices
Every year, most people anxiously await their tax refund. This is because many get a sizable amount of money back from the government, usually averaging around $2,744. It’s essential to use a tax refund wisely. Here are ten smart ways to put your tax refund to good use.
Pay Off Existing Debt
Credit card debt is common and can quickly accrue considerable interest rates. Paying off existing credit card debt is a great way to use a tax refund. The money can go toward student loans, car loans, and other outstanding debt you may have, providing much-needed financial relief.
Build an Emergency Fund
Emergency funds are important to have at one’s disposal because a disaster can strike without warning. It’s a beneficial move to open an emergency account and save at least part of a tax refund in it. If a medical crisis strikes or there’s a sudden leak in the home that needs fixing, the money can go toward it.
Fund an IRA
Even if you already have a 401(k) plan through your employer, it’s a great idea to open an IRA for additional funds. Making contributions on a quarterly basis can bulk up this retirement account and be beneficial in the long term.
Invest
Investing is a great way to make a tax refund go a long way. Many online stock brokers are affordable for small investors, so it’s important to research all options to get the maximum benefit.
Buy Flood Insurance or Increase Liability Coverage
Individuals who reside in areas that are at low or medium risk of flooding can buy flood insurance for as little as $1,000 or less from the National Flood Insurance Program. It’s also possible to purchase an umbrella liability policy with $1 million worth of coverage for less than $500.
Savings Account for a Big Purchase
Opening a savings account for a big purchase in the future is wise as well. If you aspire to one day put up a down payment on a house or go on an incredible vacation, a savings account can really help. This is money that should remain separate from a regular bank account to prevent the urge to dip into it.
Make Home Improvements
Home improvements for less than $1,000 can make a huge difference. There are a number of improvements you can make in your home for such little money including adding landscaping, repainting a room, installing a new vanity in the bathroom, and more. This increases the value of a home and is an excellent long-term investment.
Donate to Charity
A tax refund gives people the perfect opportunity to give back by donating to a cause in which they genuinely believe. This is also tax deductible, so anyone donating should keep their receipts after they donate.
Replace Inefficient Appliances
Replacing appliances that are old and not working efficiently is also a beneficial way to use a tax refund. Not only do new appliances work better, but they will also save energy and allow you to save big on utility bills.
Invest in Yourself
You can also use your tax refund to invest in yourself. If there’s a specific class you always wanted to take that can make a huge difference in your home or work and greatly enrich your life, do it.
No matter what you choose to do with your tax refund, be sure that it does not dig you further in debt. In such instances, debt collectors may start calling, and creditors may even pursue legal action. The credit card debt attorneys at Benveniste Law Offices can help repair your debt issues. Through creditor negotiation, we can settle on a debt settlement plan that is most favorable to you. Contact us today for a free case evaluation.
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