It’s that time of year again. I hope you haven’t blown your tax refund check just yet. If you have, no worries, you can still put these tactics to great use. If you haven’t, below are some things you should do with your refund check.
1. Invest in a Roth IRA
This is easy. There are several “FREE” Roth Ira’s that don’t require a minimum deposit and don’t charge a lot of fees. Betterment is one. You can’t touch this money once it’s in. This is good! Basically, you want to make sure you are secure in old age. Many individuals have a hard time saving and taking your refund check and investing is a good move.
This is the scenario you could face if you do this correctly:
Starts Roth Ira at age 30
Invests $5000 a year (that’s $416/month or it could be some of your refund check)
By age 35: $30,766.45
By age 60 you have: $505,365.21
2. Pay off Debt
The little medical bills on your credit, or the old cable bill, get them off ASAP! You can simply write the companies/collection agencies a short and straight to the point letter. Tell them you want to pay your debt in full in exchange for them removing the account from your credit report. This works. Don’t let $500 medical bills keep you from buying a house in the future.
3. Set up a college fund for your children
Most individuals receive a higher tax refund check due to the simple fact that they have kids. Why not invest that money back into your children’s future? Set up a 529 College Savings plan, or a high yield savings account, to save for your child’s education. Even if your son or daughter decides college isn’t for them, at least they will have a head start with funds available to start their own business or travel the world.
Think of this scenario:
Tax refund Check $5000
Save $2500 a year for 15years
Child could possibly receive $37,500 or more by age 18.
Let’s keep our children debt free!
4. Buy a Foreclosed Home and Rent it Out
It’s time for us to stop investing in things that won’t give us a return on our investment. For example: shoes, bags, and cars. Real Estate is a great investment. If you have uncles, fathers, or even if you have skills to rehab a home then take a stab at it. Why not bid on a HUD home? Find one that requires minimal repairs and make the repairs. You can then rent it out and receive a profit each month. Yes, it’s a lot of work, but it’s rewarding. Imagine being able to rent to someone that can’t purchase a home at this time. Let’s all lift each other up.
