This is the big month where accountants are working overtime, and many people will be checking their accounts to see when a tax refund hits their bank. Though, if you have children, you may notice that your refund is a bit lower this year because of the advance sent to families in the fall of 2021!
If you are expecting to receive a tax refund this year, I have put together a couple ideas for you to stretch it out, and benefit from it in the coming months.
Stock those sinking funds.
You have probably heard me say this before, but, “Sinking Funds are POWER!!”
When you have money saved up for expenses that you know are coming, you will feel so much more peace when you have to pay them!
Whether it is a house fund to cover a new appliance, or a car fund to cover repairs you will have in the future, sinking funds will make a huge difference when the “unexpected” expenses pops up!
Some sample sinking funds are: travel, Christmas/holidays, house fund, car, kids braces, medical expenses, etc.
You can distribute money across several funds, or stock up one in particular that you know will be an issue over the next year. For example, if your car is having trouble, let’s stock up that car fund for repairs or a new vehicle.
Pay down debt.
Here you could take a portion of the tax refund to pay off some debt. This doesn’t mean you have to apply every dollar to debt, but it can help you to gain a bit of momentum as you are moving towards financial freedom.
If you are working through Dave Ramsey’s Baby Steps, you know that the next step will be to pay down the smallest debt that you have.
If you have more specific questions about your refund, and want me to help you navigate the best ways to handle it, reach out to me on social media and we can have a chat.
You shouldn’t have to do finances all on your own.
