Top 10 Ideas for Your Tax Refund

"Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort." --Franklin D. Roosevelt--

Even if your tax refund isn't as large as you'd like, it is a lump sum, one that can do so many wonderful things for you! Why not use it to make your life just a little bit easier?

1. Train for a New Career
Maybe you've been wanting a new career, but haven't had the money to get started. Training costs money. Perhaps you're wanting to learn medical transcription and work from home some day soon. Bank this return and use it to fund your training.

2. Open a Car Account
If your car decides to call it quits, will you be forced back into the car payment merry go round? Tucking away each refund over the next 5-7 years could nearly pay for your next car.

3. Begin a Clothing Fund for the Kids' Clothes
When you have money set aside, you can afford to find kids' clothing at great discounts -- without whipping out your credit card. Do this each year and you'll be ready when the new school year rolls around.

4. Begin a Home Repair Fund
If you're a home owner, you'll eventually have to replace your roof. Why not save up now for the money you'll need? Build up your fund by depositing $10 or so from each paycheck. Also tuck into this fund any miscellaneous cash gifts you receive.

5. Open a Vacation Fund
The trick here is to allow yourself only a set amount to spend each year on your vacation, always leaving the majority of the money in the bank. Aim for spending only one-fourth of it each year, or a set amount like $500. Keep funding it with your refunds each year.

6. Open a Christmas Account for Next Year
The holidays are over, but are the credit card bills still arriving? Each year we think of setting up an account like this. But then we worry about where the money would come from - and we give up on the idea. Your refund, no matter how small, is ready and waiting to ensure next year's purchases will be pre-paid.

7. Open or Add to Your Emergency Account
Having an Emergency Account is the difference between knowing you'll be okay if you have an emergency, or stressing out over where you'll scrape up the money you need. We all have our own idea of an emergency, but why not be ready for it?

8. Use Your Refund to Pay Down Debt
Yes, you've heard this one before, over and over. A word of caution, though. If you constantly have credit card debt, it's likely you're still living beyond your means. What will keep you from spending more than you make after this year's return has paid off your credit cards? Why not split your refund? Pay off your higher-interest cards, learn to live within your means, and put some of the refund into an emergency account.

9. Set up an Expense Fund Just for Your Car
Let's face it. We need to keep our vehicle running in order to go about the business of living. Remember the last time you had to quickly buy new tires? How did you pay for them? Cash? Credit card? How about replacing a broken headlight? Even small repairs can tap into money we don't have set aside.

10. Hmmm... To Spend, or Not to Spend
Torn between saving your $1700 refund -- or buying something wonderful? Calculate how many hours or weeks you'll work to make that $1700 again. Remember, you'll lose about 30% in taxes, etc. Would tucking it away help you feel more secure?

(How about a Bonus Tip?)

11. Expand Your Hobby into a Profitable One
Do you have a hobby you love but haven't had the money to turn it into a profitable venture? Set this refund aside to purchase supplies on sale so you'll be ready to go.

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So there you have them. Ten (okay, 11) fantastic reasons NOT to allow your tax refund to be sucked up through miscellaneous purchases. Truly, the secret is to put it in savings rather than your checkbook! Once it's in savings you can move it to where it can best help you for your future.

Want to pop me an email and share with our newsletter readers what you will do with your refund? We'd love to know! Email me here: My Refund...

© 2004 Darlene Arechederra

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Darlene Arechederra offers simple, unique strategies to help others move from spending to saving. She believes the trick is to discover which ideas work best for each person -- because their money is not one-size-fits-all. Darlene encourages others to discover their *own* unique strategies for saving money! Free weekly newsletter. RatRaceRemedies

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