7 Things to Invest in with Your Tax Return

If you’re expecting a tax refund this year, now is the time to start planning where the money is going to go. Instead of treating this money like it’s a gift from the government (hint: it’s not), give this money purpose by investing in things that will give you a positive return value.

  1. Pay Off Your Debt

This is possibly the least exciting option, but it is definitely the one that will put you in the best spot financially when done correctly. If you’re feeling shackled by your debt (especially your high-interest debt), consider taking your tax refund and putting it into paying off this burden.

Other than being great for your future financially, using your tax refund to pay off your debt has the possibility of increasing your credit score – a great added bonus that we would all love to have.

2. Spend it on Something You Need

Is your car slowly starting to break down? Have you forgotten to go to the doctor in 6 years? Consider using your tax return to pay for something you truly need to get done this year to take care of the essentials that you have been putting off for some time now.

3. Invest in Yourself

Taking some time and money to put back into your own well-being is something that we typically do not do often enough. Be sure to take care of your health this year by signing up for a gym membership, finding a mattress that isn’t a hand-me-down from your great grandmother’s house, or even getting a massage (or 5!). A little bit of self-care can go a long way, especially in today’s all-work-no-play environment.

4. Invest in Your Home

Take a good look at the value of your home. Do you have projects that you started two years ago and never finished? What about renovations that you’ve always dreamed of completing but have never even gotten quoted on? Tax season is a great time of the year to evaluate where you home could use some improvements, not only to make you feel happier and more comfortable in it, but to also increase its long-term value.

5. Fund a Roth IRA

Investing in a Roth IRA is a great way to find financial stability for your future-self. Roth IRAs act very similarly to regular investment funds, but they grow tax free and are basically retirement accounts that you can fund with after-tax money.

6. Spend it on Something You Want

You’ve been saving all year, but it’s hard to not feel guilty when we splurge a little bit. If you feel you have been working hard and deserve a nice vacation or a long weekend to the coast, don’t be afraid to take it! Remember – you earned this splurge.

7. Donate to Charity

A great way to spend your tax refund is by giving to those who are less fortunate. By donating to a charity that is close to your heart, you can feel good about where the money is going while also giving yourself the opportunity for larger deductions in the following year.

Sharing your wealth with those that are less fortunate is an important aspect of good money management and can improve the lives of numerous individuals – which can feel just as great as investing in yourself and your own financials.

Elise Morgan

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6 Steps to Ditching Your Debt

Let’s face it — debt sucks! Keeping up with the payments means less cash to do what you really want. And, the interest makes the burden grow, often faster than your payments reduce the balance due. With a solid plan and a lot of determination, you can ditch your debt and get back to having more fun.

Not sure where to start? Here are Charlie’s 6 steps to ditching your debt:

Stop the Bleeding

Unless it’s completely unavoidable (like that student loan for next semester), don’t take on any more debt. Avoid new credit cards, lock up/cut up the ones that you have, and consider freezing your credit. It’s important to take control.

Assess the Damage

Now, it’s time to see what you’re up against. Make a list of all of your debts to include who you owe, how much you owe, the minimum monthly payment, and the interest rate. Then, brace yourself and determine the grand total.  (It’s OK to have a glass of wine, a chocolate cake, or a bubble bath after this step!)

Choose Your Strategy

There are two main ways to tackle debt: the snowball method or the avalanche method. With the snowball method, you pay your debts off from smallest to largest amount owed. This is great for momentum building — you’ll feel like you’re #winning pretty quickly. With the avalanche method, you pay off your debts from highest to lowest interest rate. Ultimately, the math works out in your favor here because you’ll pay less in interest overall. If you’re paying off debt, ignore any haters, because it’s a victory regardless of how you do it!

Tighten Your Purse Strings

Trimming your budget may be painful at first, but crushing your debt will feel amazing. There are some easy places to cut spending first: eating out, shopping, travel, entertainment, etc. If there are things you can’t cut completely, find hacks to spend less. Use gift cards, skip the expensive cocktail at dinner, or shop thrift stores. If you can’t cut these categories any further, consider going more extreme. Get a roommate, sell your car, or move back home. These strategies are hard, and may not be possible for you (or you’re already doing them!), but every dollar helps.

Hustle for Extra Cash

In addition to cutting your spending, try earning some extra money specifically to go toward your debt. Look for side gigs, sell your stuff, or offer freelance services.

Track Your Progress

Ditching your debt is hard work. It takes commitment and willpower. This process could take a long time, so it’s important to track how far you’ve come to keep your motivation level high. Be sure to reward yourself (in a budget-friendly way!) as each account balance hits zero.

Remember: You’re not in this alone. Charlie can help. Just tell him ‘pay off debt’ and he’ll guide you.

Share with Charlie: What’s your favorite debt pay off story? Do you have any tips for the community?

This article was originally published at HiCharlie.com

 

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What to Do When You Miss a Paycheck

You’ve finally got a handle on your budgeting and then the unexpected happens… your paycheck is late.

If the thought is already sending you into a downward spiral, hold up. Yes, missing a paycheck is a less than ideal situation, but you need to have an action plan in place before it happens.

Don’t feel like you have to take out a personal loan or grab your credit card. Go through the following steps first to see what makes sense for your individual situation.

Dance Around Your House

No really. If you’re not a dancer (but c’mon we know you can move it move it) choose another little activity that will dissipate any nasty emotions.

When you panic, you might make a knee-jerk reaction you’ll regret. Yes, you need money to survive, but if you do something like yelling at your employer or borrow money with a high-interest loan, you may be dealing with those consequences years down the line.

Instead, take a few deep breaths and try to relax. The goal is to look at your situation objectively. Once you feel more in control, move onto the next step.

Look at Your Bank Accounts

Seeing where you stand financially will help you set a plan. No matter how you feel (you got this!), looking at the numbers gives you an objective picture of what is going on.

  • Look at all your bills (including debt) and see what you owe and their due date
  • Look at how much money you have in your checking and savings accounts

Once you have those numbers,  you can create an emergency budget to get you through the red.

Tap Into Your Emergency Fund

If you have savings set aside for emergencies, now’s the time to use it. That being said, it’s still a good idea to cut your budget down to the bare necessities just in case. When you start receiving paychecks again, then you can factor in a line item on your budget to replenish your emergency fund.

For those who don’t have emergency funds, now’s not the time to feel shame around it. Take this as a reminder that an emergency fund is there to help you when times are tough. Once your situation is back to normal and you’re receiving a regular paycheck, consider setting aside money in case an emergency fund happens.

As for how much to aim for, most experts agree that $1,000 is a good amount to strive for. Once you’ve reached that milestone, then aim for more — three to six months of your expenses. Charlie can help you set one up.

Make Sure The Necessities Are Taken Care Of

Now is the time to focus on the essentials, literally. Right now, your essentials are shelter, food, utilities, and transportation AKAthe items you need to ensure you still have a place to live and food on the table. If your last resort is eating at home with your parents for a week, you do what you gotta do.

The last step had you list out all of your bills and debt. Go ahead and include expenses and list them in order of importance. Once you have that, look at your emergency budget to see if you’ve allocated money towards the essentials. If not, adjust your budget accordingly.

Let’s say you have $500 in your checking account. Take a good, hard look at what you need to purchase until the next paycheck comes in.. For example, you tend to buy groceries once a month, but you notice that your pantry is pretty well stocked. Can you get creative and make meals based on what you already have? Or can you buy sale-only grocery items?

Slash and Burn Unnecessary Items

Remember — this is temporary. Once your paycheck arrives you can get your subscription services back if it makes sense. It sucks to think about giving up on things like Netflix and meal delivery kits. However, cutting back will help provide some relief when money is tight.

f there are services you can suspend or cancel temporarily, great. If canceling them means paying a hefty fine (like many cable subscription packages), see if you can negotiate with the company to see if there’s anything they can do. Charlie can help you with that! Just say “Help me cut my bills” and he’ll lead the way.

Same goes for any necessary expenses. Call up your mortgage or insurance provider and explain your situation. Some companies —  though not all — may help provide some relief by allowing you to defer your payments.

Sell Your Stuff

If cash is really tight, consider selling some of your unwanted items. Go through all your goods to see what you can sell — think baby clothes, designer items, books, CDs and even jewelry. There are plenty of resale or consignment stores that will take those items off your hands and pay you cash right away.

You can also consider selling your time and skills, like offering to mow your neighbors’ lawns, walk some dogs, or tutor kids in the evenings. There are tons of ways to put a few extra dollars in your pockets. Get creative and you may be surprised and what you’d find!

Talk to Your Employer

It varies from state to state, but most employers in the U.S. are required to disclose when and how you’ll get paid. Now’s the time to approach your employer to ask what’s going on and when you can expect to receive your next pay. You may also want to contact your state labor agency to find out about your rights. This way, you can keep updated on what’s going on and it might provide some relief.

If you do miss a paycheck, remember that it’s not the end of the world. Breathe, try to relax and look at your financial situation objectively. There are solutions. And if you need to ask for help from friends, family or in the form of a loan, so be it.

You’ve got this.

This article was originally published at HiCharlie.com

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