How to Invest a Tax Refund

Taking money from your paycheck and finding ways to use it beyond paying bills is difficult to manage. When tax season roles around, that IRS check can be utilized in several creative ways to help you get ahead. Follow these simple steps to invest a tax refund.

Instructions

Difficulty: Easy

1. Eliminate all or a portion of credit card debt and save thousands of dollars in interest by paying down your highest rate credit cards with your refund. Use any amount of money to help you reduce any debt that you might have. An intelligent investment is reducing your debt to zero.
2. Put your refund into yourself, literally. Use a tax refund to have medical work done that you've been putting off or to buy a gym membership.
3. Improve your home. Take those tax refund dollars and redo a bathroom or living room.
4. Add new paint or appliances. This will increase the resale value of your home, which could turn an additional profit.
5. Extend your stock portfolio outside of the norm. Further diversify investments by including international stocks, which will perform better if the dollar tumbles.
6. Stash your cash in an emergency fund where it can be accessed if unexpected bills come up. Use it to pay off car repairs or sudden medical problems.
7. Use that extra money to reduce your stress. Go away on an inexpensive vacation, take your spouse or partner along for a quick weekend trip to relax and recharge.
8. Invest in the IRS. Let the IRS retain your refund and apply it to next year's taxes to keep your bill down