The Dos And Don’ts Of Spending A Tax Refund

Lifestyle
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Of course, everyone doesn’t get a tax refund, but if you are it’s important to think about what you’re going to do with your found money.

There’s nothing more stressing than tax time. I dread pulling all the documents together and filling out the paperwork to hand off to my accountant. Oh, poor me, that I have an accountant, but I know my strengths and weaknesses and doing my taxes isn’t one of them.

Every year though I sweat out what the final numbers might be. Will I owe money and how much? With each additional question from my accountant I grow more worried that I will owe a BIG number. I’ve been saving money all year thinking I might have to need some savings. Thankfully tax time is only once a year.

Here are my personal tips for making tax time easier. 

Buy accordion folders to house receipts.
I found these great accordion folders at Staples and love them. I buy a new one every year as not everything can be tracked online. They are expandable and hold a lot.

Pay for most of your expenses by credit card.
First, don’t put everything on credit cards if you can’t afford to pay them in full at the end of every month. Second, make sure they’re cash back rewards cards. I sweep the cash back back into my account. But best yet, banks offer end-of-the-year summaries and these summaries are organized by category of expense so all the medical bills or home improvement charges are all organized making it easier if you have items you can claim.

Getting a refund?

Here’s a great infographic from Earnest with ideas for spending or putting your tax refund to good use. Earnest specializes in both granting personal loans and refinancing your student loans. My favorite tip is to treat yourself just not with the entire refund. Can you exercise that type of control?

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