With tax refunds averaging over $3,000 in 2024, refund checks can have a significant impact on many Americans’ finances. If you’re looking for ways to maximize your refund, you’ve come to the right place. Everyone wants to make the most of their refund money, so here are five ways you can use your tax refund to add more money to your pocket!
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Pay Off DebtPut It in High-Interest SavingsStash Away Money in a Certificate of DepositInvest in YourselfInvest in the MarketPay Off Debt
How will paying off debt make you money? High-interest debt, like credit card debt, can drain your budget every month. In addition, if you only pay the minimum monthly payments on credit cards, you’ll be overpaying for your purchases with all the interest payments added into those monthly minimum payments.
If you were to pay off some of that debt with your tax refund, then those monthly payments you would’ve been paying can now go towards your money goals, which include having money for vacations, saving up for a house, or investing and watching your money grow. Think of it as giving yourself a raise!
Put It in High-Interest Savings
Interest rates have been going up over the last year or so. That means you can put your money to work. Depositing your money into a high-interest savings account can help you earn around ten times more than the average offers of banks. Shop around to find the best banking option for you and your money.
Stash Away Money in a Certificate of Deposit
Do you have a long-term goal like saving up for a house? Give yourself a running start by putting that cash in an account that can earn you more money like a certificate of deposit (CD). It’s a low-risk way to boost up the interest earned on money you’re going to need in a few years when you find that perfect house.
Invest in Yourself
You may be spending more time at home, so use that time you had spent on your commute and invest in leveling up your skills. There are many online options where you can gain a certification or experience with programs used in your field. While no one can predict the job market, you can increase your value by building your expertise.
Another way you can invest in yourself is by diversifying your income with a side business or a side hustle.
Invest in the Market
If you haven’t been able to invest in the stock market in the past, you may be able to start now given that some stock prices are lower. While things are volatile in the short term (less than one year), if you look at the historical returns, you’ll find that investing in the stock market long-term (over one year) may be a wise financial decision.
One way to build a diversified portfolio without having to follow individual companies’ performance is by investing in index funds. An advantage of index funds is the lower fees which means more of your money is working for you. It’s a win-win situation!
No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed.