7 Ways to Make Money With Your Tax Refund


What's Hot


2 Types of Black Marks Might Vanish From Your Credit File SoonBorrow

6 Ways the Obamacare Overhaul Might Impact Your WalletInsurance

7 Dumb and Costly Moves Homebuyers MakeBorrow

This Free Software Brings Old Laptops Back to LifeMore

Obamacare Replacement Plan Gets ‘F’ Rating from Consumer ReportsFamily

Beware These 12 Common Money MistakesCredit & Debt

21 Restaurants Offering Free Food Right NowSaving Money

17 Ways to Have More Fun for Less MoneySave

House Hunters: Beware of These 6 Mortgage MistakesBorrow

30 Household Uses for Baby OilSave

25 Ways to Spend Less on FoodMore

Nearly Half of Heart-Related Deaths Linked to These 10 Foods and IngredientsFamily

5 Surprising Benefits of Exercising Outdoors in WinterFamily

10 Ways to Save When You’re Making Minimum WageSave

Boost Your Credit Score Fast With These 7 MovesCredit & Debt

7 Painless Ways to Pay Off Your Mortgage Years EarlierBorrow

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

The True Cost of Bad CreditCredit & Debt

10 Companies With the Best 401(k) PlansGrow

This Scam Now Tops ID Theft as the No. 2 Consumer ComplaintFamily

6 Stores With Awesome Reward ProgramsFamily

6 Ways to Save More at Lowe’s and The Home DepotSave

6 Healthful Treats for Your DogFamily

New Study Ranks the Best States in the U.S.Family

Thousands of Millionaires Moving to 1 Country — and Leaving AnotherGrow

Strapped for College Costs? How to Get the Most From FAFSABorrow

6 Overlooked Ways to Save at Chick-fil-AFamily

Ask Stacy: What’s the Fastest Way to Pay Off My Mortgage?Borrow

Where to Sell Your Stuff for Top DollarAround The House

8 Ways to Get a Good Price on a Shiny New AutoCars

Ask Stacy: How Do I Start Over?Credit & Debt

Secret Cell Plans: Savings Verizon, AT&T, T-Mobile and Sprint Don’t Want You to Know AboutFamily

30 Awesome Things to Do in RetirementCollege

14 Super Smart Ways to Save on TravelSave

The Rich Prefer Modest Cars — Should You Join Them?Cars

You’ll Soon Pay More to Shop at CostcoSave

10 Ways to Save When Your Teen Starts DrivingFamily

They say it takes money to make money. If you're about to get a tax refund, here are seven ways to leverage that cash into more.

Last year, more than 110 million Americans received an average tax refund of $2,803, the IRS says.

But a January increase in payroll taxes means a smaller paycheck for most Americans going forward, and that fewer people will run out and buy a new TV or car with the windfall, according to the National Retail Federation. Nearly half of those expecting a refund plan to pay down debt, and another 40 percent will put it into savings.

Good thinking, but can you do more? In the video below, Money Talks News founder and CPA Stacy Johnson wraps up our Tax Hacks series with a few more smart uses for tax refunds. Check it out, then read on for more ideas…

As Stacy suggested, changing your tax withholding on your W-4 at work is one way to make sure you don’t waste a refund – you’ll get to keep more pay year-round instead of receiving a fat check from Uncle Sam once a year.

But if you’re not sure what to do with your refund this year, here are some ideas that will make you richer – either by protecting your bottom line (from fees, interest charges, and frivolous spending) or by offering memorable new experiences…

1. Pay down debt

Use your refund to reduce high-interest balances. Not only does this cut down the interest charges and overall amount you owe, it may also improve your credit score by lowering your credit utilization ratio. And a better score can mean easier access to credit at better rates – something that can make you richer.

Look at it this way: Paying down an 18-percent-interest credit card is like earning 18 percent, risk-free and tax-free. There aren’t many investments that offer returns like that.

2. Create an emergency fund

Living paycheck to paycheck often means there’s never enough to get ahead. Use your refund to build a financial cushion, ideally enough to cover at least three months of living expenses. Then bills always get paid on time, which saves late fees; you never need a cash advance, saving fees and high interest; and you can stock up on bargains at the grocery store. And the peace of mind? Priceless.

And if you’ve already got an emergency fund, set the money aside for something you know you’ll have to replace eventually, like your next car.

3. Save on insurance

Speaking of vehicles, many car insurance companies offer a discount if you pay the six- or 12-month premium in full. Use a chunk of your refund to do that, and put the rest in a savings account so you can raise your deductible – a simple way to save 10 to 20 percent on your premium.

4. Use it for something deductible

Earn a tax credit with energy efficiency improvements to your home, pump up a retirement plan, or donate to charity and your tax refund will be doing double duty, because you’ll be creating a deduction you can use next tax season.

5. Start a business

Use your refund as seed money for a side business, or classes in a skill you’ve always wanted to learn. You could launch a website, sell your own arts and crafts, or start a garden and sell your extra fruits and veggies at a farmers market. Boosting your skills might be good leverage for a raise.

6. Think big

If you’re going to blow the money, at least make it an event to remember – maybe take the family skydiving. Anything’s better than just frittering your refund away in forgettable ways.  If you opt for a vacation, stretch it by saving, whether you want a traditional vacation for cheap or a getaway in the Italian countryside.

Like Stacy said in the video, if you’re going to spend the money, don’t make a purchase, make a memory.

7. Invest

You could start funding a 529 college savings plan, or open an individual retirement account for yourself. Earn 10 percent annually for 20 years and your $3,000 refund will blossom into $20,000. Make it a habit and invest $3,000 every year for 20 years, earn that same 10 percent, and you’ll end up with more than $200,000.

What are you planning to do with your tax refund this year? Tell us below or on our Facebook page!

And if you haven’t filed yet, make sure you get the biggest refund you can. Check out the links below for other stories from our tax hacks series.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!

💰🗣📰

Read Next: 50 Ways to Make a Fast $50

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 2,005 more deals!