Productive Ways to Spend a Tax Return

With tax season underway, many Americans will be receiving an extra check in the mail.  The burning annual question of what to do with that tax return will always be present as the country creeps toward spring and summer.  Oftentimes if people get a return they end up blowing through it on useless costs and this isn’t ideal.  Below I’ve offered some productive ways for people to spend their tax return.  Rather than hitting the bars or going out to eat, people need to consider something life-changing.  Money is valuable and there is no better time to utilize it the right way than tax season.

 

1. Travel Somewhere

Many people don’t see enough of the world.  The main reason is travel is expensive.  A tax return, usually on the order of hundreds to thousands, represents a great means of kick-starting the travel bug.  A round trip flight to somewhere like Australia can be found for under $1,500 and many Americans will receive tax returns higher than this.  If you get a return, go somewhere you’ve never been.  Consider seeing family or friends who are becoming distant memory.  Traveling is worth the money and sometimes it’s hard to justify spending hard earned money on a plane ticket.  With a tax return, it just might be an option.

 

2. Consider an Investment

When most people start an investment, they have extra money.  Receiving a tax return is an ideal time to head down to the local bank and consider some sort of investment fund.  This could be anything from stock shares to bonds to a conglomerate mutual fund.  Either way, the point is that Americans getting money back from taxes should at the very least consider investment potential.  There is no better financial decision than setting oneself up for the future.

Tax Return Productive Ways to Spend a Tax Return

80x15 Productive Ways to Spend a Tax Return
“How do you like my earrings?  I bought them with my tax return.  I know I look awesome and you’re jealous”.   Ethiopia Tribes, Lomo by Dietmar Temps, on Flickr.  This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.

3. Buy a Piece of Jewelry for a Loved One

Throughout everyday life, most people struggle to come with the money to buy genuinely nice gifts for those close to them.  One way to buy a quality piece of jewelry is to take all of the old jewelry you don’t use anymore down to the nearest cash for gold store.  After getting some cash, tack on a small portion of your tax return and go buy your loved one a quality stone.  The effort and the budget way you went about it, will be rewarding for both of you.

 

4. Combat any Debt

Consider using a tax return to confront any debt you may have.  It can be helpful whether it is credit card payments, medical bills or student loans.  Many would argue that there is not a more productive way to spend money than paying off anything owed.  A main reason to consider this is to increase credit.  The better your credit, the more flexibility lenders will provide you in the future.

 

5. Take the Car In

Automobile costs can really dent a person’s bank account.  Even if your car is running smoothly or only has minor issues, consider taking it in.  A tax return is a good excuse to check your car with the goal of preventing a major breakdown in the future.  Because it is hard to take anything in when it still runs, this could be a good time to take the safe route.

 

6. Improve Your Home

Whether it is outfitting the entire house with fresh plants and candles or getting a new mattress for your room, a tax return can lead to productive house improvement.  Home improvements are often pushed to the side because people don’t have the funds or energy to improve something that satisfies their basic needs.  This time of year can spark renovation that you deserve but haven’t had the time or funds to execute.

While tax returns vary, any amount is a positive amount.  Enjoy yourself with the cash but try and be productive at the same time.  Whether it is traveling to see your relatives or paying off unwanted debt, use the return to your advantage.  You deserve it.

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Comments

  1. I would definitely consider one of these options (probably increasing investment combined with a travel splurge) but I owe money again this year…crap!!!! I wrote about it over on my site, but I basically owe about $4,000 as of right now…whoops! Oh well, maybe next year??? :)
    AB
    Aspiring Blogger recently posted..I Screwed Up My Taxes Again!My Profile

    • Arnel Ariate says:

      Hi, AB. I am happy you’re back in Money Soldiers. What? You, owe about $4,000? I find that hard to imagine because you seem to be very frugal.

  2. Haha, yeah – take a look on my site (I think it’s linked to my earlier comment), but I think my withholding was wrong (the amount taken out for taxes) and so I’ll be writing a nice fat check in a couple of months!
    AB
    Aspiring Blogger recently posted..10 Money-Saving Shopping Tips!My Profile

  3. You’ve laid out great options to spend ITR productively but I’d like to consider most was getting to an investment. You can never lose money on investments especially on real estate.

    • Arnel Ariate says:

      Hi, Christina. I believe any investment is not totally risk-free. Out of all the different productive ways of using your income tax return mentioned in this article, I’d like to put most of my money in investing, too.

      • It could be, but it depends on how you manage to get the right recipe for your investment to keep going.

        • Arnel Ariate says:

          Very true. Though we cannot eliminate risk totally, with the right management skills we can keep the risk to a minimum and hopefully the benefits will outweigh the risk.

  4. There is always some amount of risk in any kind of investment we make but its really very important to make investment because this is your second income. A higher amount of risk also gives high returns. We can reduce the risk by investing for longer periods of time, specially in stocks, gold and real estate.

    • Arnel Ariate says:

      Correct. Risk is always there and the riskier your investment is, the higher the potential reward can be and vice versa. Risk is not just for investment, it is in fact, applicable in all that we do such as in our relationships and matters of the heart, for example but that is another story and beyond the scope of Money Soldiers.

  5. Tax return time always comes with the temptation to splurge, but that single purchase is usually temporary! A low-risk mutual fund is a great way to turn that little cash bump into a much larger benefit down the line – and you may not even miss it.
    Lyndsay at Matco Financial recently posted..Portfolio CheckupMy Profile

    • Arnel Ariate says:

      Hi, Lyndsay. That’s a good tip. I’m also in favor of investing your tax return money in good investments such as a low-risk mutual fund. Go! go! go!

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