Personal Tax Refund – 5 Ways to Make More Money Spending Your Refund – Part 1 of 2

Info at Info

Please read the disclaimer before you continue. tax

The time has come once again. For some it is a time to get excited and ponder all the possibilities. For others, it’s a time to bite your nails, grind your teeth, and wonder how you will come up with money. If you are a good planner, business owner or just lucky; tax time can be a good opportunity to get some cash back into your pocket with your personal tax refund. For myself, I enjoyed several thousand dollars back. If you do find yourself with some extra cash back at tax time, you may be wondering what to do with it. It is actually possible to spend your personal tax refund and compound the effects to make more money.

Don’t be like most people. The average person will take their personal tax refund and blow it on liabilities. They will buy things like: boats, TV’s, unnecessary clothes and generally things they do not need. If you want to get a better grip on your personal finances, then your personal tax refund is a great starting place. The thing that is funny is if you invest and spend your money correctly early on, later you will be able to buy all the boats, TV’s and clothes you can handle. Spend your money wisely and the effects will compound:

5 Ways to Make More Money Spending Your Personal Tax Refund

1. Pay off debts. This seems like a no brainier, but not to everyone. Some of my past clients actually saw their personal tax refund as extra money in their hand even though they had thousands of dollars in debt. Lets say you have a department store card at 28.8% interest that you are paying the minimum monthly balance of $50 on. If you put $2, 000 onto that card you would save yourself $12, 481.62 in interest. $50 a month with a $2, 000 balance would take you 300 months to pay off that card. Seems worth it to me to take your return and pay off that card.

2. Invest It. This all depends what your definition of investing is. You could top up your work pension contributions, or invest it in mutual funds. You could take your personal tax refund and put it into stocks, bonds or any other paper asset. If you are uncomfortable with the current market situation, you could leave it in a high interest bank account or buy GIC’s. The whole idea is to make your money work for you instead of spending it on necessary items. Sticking with our example: $2, 000 put into a mutual fund that earns 8% annually would give you a vale of $14, 680.35 in 25 years. That is more than seven times the value of your what your original refund was. I like those numbers.

These are just a couple of ways to increase your personal tax refund by spending it. Money has a great compounding effect. Just one change can make the value of your money increase substantially. The next post will cover the last three ways that you can make more money spending you personal tax refund. If you would like more help with taxes, I found a really cool blog here.

Get the Tools the Wealthy Already Have!