Well, it’s that time of year again! That’s right, most of us are getting our tax refunds back!
What are you doing with your tax refund this year? Last weekend, I was out doing my regular Saturday morning grocery shopping, and I happened to stop in the home improvement store to pick up something that I needed to fix something else in the house. You’d have thought it would be a quick trip – in and out in minutes. Not so! The store was packed with people and they were spending money like crazy! So, I asked a friend who happens to work there what was going on, and she said that people were spending their tax refunds. Hundred dollar bills were flying around like nothing, she said. And then I thought about that… if I could afford to do that, would I spend my entire tax refund? Probably not.
Unlike the people who are spending their refunds on home improvements, vacations to the beach, or something totally frivolous, you could use your tax refund constructively, and pay down a little debt, get a fresh start on a less than stellar credit rating, or even put it into a savings account for a rainy day.
While it’s not quite the same as the instant gratification you’ll get from spending it all on a Saturday afternoon, the long term benefits can be just as rewarding… especially if you see what happens to your credit score after you pay something off or use some of the cash to open up a secured credit card. Both options will increase your available credit, which will typically increase your credit score! And a better credit score means better credit options down the line… when it’s time to apply for that new job, buy that car, or even qualify for that new home you’ve been dreaming of!