1. Train for a New Career

Maybe you’ve been wanting a new career, but haven’t had the money to get started. Training costs money. Perhaps you’re wanting to learn medical transcription and work from home some day soon. Use your tax refund to fund your training.

2. Open a Car Account

If your car decides to call it quits, will you be forced back into the car payment merry go round? Tucking away each refund over the next few years could nearly pay for your next car.

3. Begin a Clothing Fund for the Kids’ Clothes

When you have money set aside, you can afford to find kids’ clothing at great discounts — without whipping out your credit card. Do this each year and you’ll be ready when the new school year rolls around.

4. Begin a Home Repair Fund

If you’re a home owner, you’ll need money for repairs.  Build up the money you’ll need by depositing $10 or so from each paycheck.  (Don’t forget to tuck into this fund any miscellaneous cash gifts you receive. )

5. Open a Vacation Fund

The trick here is to allow yourself only a set amount to spend each year on your vacation, always leaving the majority of the money in the bank. Aim for spending only one-fourth of it each year, or a set amount like $500. Keep funding it with your refunds each year.

6. Open a Christmas Account for Next Year

Tired of paying fo the holidays months into the new year?  Each year we think of setting up an account like this. But then we worry about where the money would come from - and we give up on the idea. Your refund, no matter how small, is ready and waiting to help you pay for next year’s purchases.

7. Open or Add to Your Emergency Account

Having an Emergency Account is the difference between knowing you’ll be okay if you have an emergency, or stressing out over where you’ll scrape up the money you need. Be ready for it, and alleviate the stress of not knowing if you’ll survive an emergency.

8. Use Your Refund to Pay Down Debt

Yes, you’ve heard this one before, over and over. A word of caution, though. If you constantly have credit card debt, it’s likely you’re still living beyond your means. What will keep you from spending more than you make after this year’s return has paid off your credit cards?

Why not split your refund? Pay off your higher-interest cards –  put some of the refund into an emergency account.  Why not learn to live below your means, and avoid using your refund to pay credit cards next year?

9. Set up an Expense Fund Just for Your Car

Not only must we keep our vehicle running for daily living, but sometimes we need money for small repairs, too.  They can tap into money we don’t have set aside.  Why not focus on growing your own car fund for these expenses? 

10. Hmmm… To Spend, or Not to Spend

Are you torn between saving your refund — or buying something wonderful? Calculate how many hours or weeks you’ll work to make that money again. Take into account you’ll lose about 30% in taxes, etc.   Is it easier to save it now — or work for it all over again?

(How about a Bonus Tip?)

11. Expand Your Hobby into a Profitable One

If you set aside money for your hobby, you can purchase supplies on sale — saving you even more money.  Why not take that hobby you love and help it become profitable for you?  

So there you have them. Ten (okay, 11) fantastic reasons NOT to allow your tax refund to be sucked up through miscellaneous purchases. There are so many great ways to spend your tax refund.  Tuck it into savings first.  Then you can move it to where it can best help you for your future.

Want to pop me an email and share with our newsletter readers your own ideas for a tax refund?  We’d love to know! Email me here: My Refund…

© 2004 Darlene Arechederra

Darlene Arechederra is the creator of “Goodbye Boss, Hello Kids! — A Mom’s Guide to Coming Home From The Workplace.”  Moms who have considered returning home will enjoy her FREE Report, “5 Secrets to Coming Home.”  Claim your free report at  http://AffordToStayHome.com/5secrets.html

Also, enjoy her FREE report, “Five Deadly Myths of Saving (and How to Save Anyway!)” Simply Right-Click Here:  http://RatRaceRemedies.com/5-deadly-myths-saving.pdf