If you are going to receive the IRS refund soon, you might have planned on going on an exotic vacation or remodel your kitchen. Most people when they receive the refund already have a plan to spend it on a variety of things. But has it ever crossed your mind that you can make each dollar earn more dollars for you?
You can use the IRS refund to pay off your pending bills and other debts because if you have lots of debt, the last thing you’ll want to do is splurge away the refund check. Additionally, the refund check funds can be used to lower your debts, reduce the interest charges and help you consolidate your finances for the better.
Repayment on loans and mortgages
Another good use of the refund is to put it away for future repayments on mortgages. By overpaying on your student loan, you can automatically reduce the interest charges. Though most people consider it a chance to splurge on other things, but it would be smart move to prepay loans. And paying your loans quickly can help.
Prepayment on utility bills
If you don’t have debts to pay off or any other financial issue to take care of, using the IRS refund to pay your bills in advance is another good option. Make a lump-sum payment. Most people don’t expect a refund, but putting it to use can be an option. Prepaying the utility bills for the next few months can help you tide over the financial issues with ease.
Put it in your saving account
Another aspect is using the money to enhance your bank balance and earn interest on it. It is always a smart financial move to bulk up your savings account. If you are tempted to spend it, maybe budget a small portion only. You worked hard to earn the refund and it is better to leave it in your account to take care of financial requirements in the future.
Enhanced emergency funds
Use the refund to add to the emergency funds, to cover unexpected situations, including job loss, medical illness and other emergency requirements. Save it for a rainy day and you’ll be glad that you did.
When you own a home and it needs necessary repairs that have been put off for a while, the IRS refund can do wonders. Putting have urgent home repairs can increase the damage so it is best to get it done as soon as you have some funds available. So think carefully and make the best use of IRS refunds.