How to Make Your Tax Refund Work Harder for You
Difficult as it may be to resist blowing your entire tax refund on that designer bucket bag you've been lusting after, consider some alternative uses for your check. We asked Mint’s consumer spending expert, Holly Perez, to dish on the best ways to put your money to work.
What do you consider the most strategic use of your tax refund?Putting it into an emergency fund. Odds are you aren't fully prepared for unexpected expenses (your car breaks down, or you need an emergency root canal). To avoid getting burdened with serious debt, beef up your emergency fund with your refund. Ask your bank about a high-yield savings account so your money makes even more money when it’s just sitting there.
If you're new to investing, but you'd like to give it a go with your refund, what tools do you suggest for beginners?Acorns is a great app that lets you proactively invest spare change automatically from everyday purchases into a diversified portfolio. Your “spare change” from linked credit and debit card purchases is rounded up to the nearest dollar and invested in a recommended stock portfolio based on information like your age, time horizon, investment goals, and the amount of risk you’re comfortable taking.
If you want to use your refund to splurge on a vacation, what's the best way to stay within budget?Don’t feel bad if you set a portion of your tax refund for something fun—but before you plan anything, know how much you can spend. Keep in mind you’ll have to cover travel to the destination as well as lodging, meals, and activities. Mint's Travel Calculator can help you save money today so you can enjoy a debt-free getaway later. It lets you add in details about your travel, whether it’s a romantic getaway or beach vacation, the length of your trip, and the number of travelers so you know how much you'll need.