Thanks to full-time employment, this is the first year I’ll have a really substantial tax return. While I could easily spend every penny of that return on Chinese takeout and OPI nail polish, this year I’m planning more mature ways to stretch my tax return dollar.
1. Put a Dent in Debt
Looming on the horizon of each new month are my bills for money already spent. While my tax return unfortunately isn’t big enough to knock out ALL of my student loans, a significant amount will be portioned out to make extra payments on the principal balance. The cash will also be put to good use toward depleting my credit card debt. Your future self will thank you for such brilliant foresight.
2. Save It for Later
Obviously it’s always good to put some money in a safe place for the future, and what better time to drop in an extra chunk than during tax return time? At the very least it comes in handy when you have to drop a security deposit on a new apartment, or when your dryer shrinks all of your clothes to Barbie-like proportions. Maybe, just maybe, you’ll even habituate yourself to saving a bit more on each of your future paychecks for emergencies.
3. Invest in Future Necessities
Buying things you need in advance when you have a lump sum is a great way to make you feel like you’re saving money later in the year. Shampoo will run out in three months? Better buy a replacement now to keep on hand. I only have seven boxes of pasta in the pantry? I’ll buy 20 more at the grocery store today. Two months later when I have an extra $20 left over in my bank account, I won’t feel guilty about renting a dozen Red Box movies on a lazy Sunday.
4. “Treat Yo Self”
I know this sounds like it completely contradicts the preceding four options, but the smartest way to spend some (emphasizing some, not all) of this extra money is on yourself. As someone who very rarely spends much outside of bills and groceries, I love to be able to save some of my tax return money for going to see a movie in theaters, buying a new book to read, or setting aside a weekly fund for Ben & Jerry’s pints (now entering a judgment free zone). It’s the little things that keep your sanity in check during times when you’re stretching a budget.