5 Ways Tax Refund Check can Improve your financial future


I grew up in an environment where people mishandled money. I had a friend who lost his mother, she left him a generous amount of money. My friend was broke within a year of his inheritance. He mishandled his money purchasing a few cars and leather jackets, which led him back into the projects. I’ve always felt that most of our financial problems stem from being undereducated about money. We use our money on material things to improve our appearance instead of the quality of our lives.

The expectancy of the yearly income tax refund to improve appearance, has become a way of life for many people. I always see where the money is going every year around April 15. When people received their refund, they start shopping, new clothes with matching outfits for the entire family. People buy new cars, they are physically looking cleaner, all from a check you received from the government for overpaying them throughout the previous year. I have a few ideas on how to properly manage your income tax refund to improve yours and your family’s financial future.

Here are my top 5 smart ways to help you excel with you income tax refund.
The average income tax refund check in the US is $3,000.

1. Make a real-estate investment with your refund check, make a down payment on a house or condo.
A down payment on a house or condo is not as intimidating as it sounds. There are many programs available for first time homeowners. These programs vary with each state and city, you may contact your local housing department for more details. Some of these programs include matching your savings for a period of 6 months to 1 year. You can also obtain a grant of up to $13,000 which can be forgiven after staying in your house for 10 years. FHA also offers a 3.5% down payment in addition to other concessions. I believe the purchase of a home is the best investment anyone can make for themselves and their family.

2. Use your refund check to invest in yourself, it is the greatest investment anyone can make. Taking the time and learning to better yourself in any part of your life is an amazing investment. This investment could be improving yourself mentally, physically, spiritually and or financially. We have this idea that we can’t do certain things, because we cannot conceive ourselves doing it. Everyone can learn to be or do anything with the proper investments and actions. We can all learn if we make it a priority to improve our lives. Many people have created great lives for themselves, by having an idea and investing in that idea through trail and error. $3,000 can go a long way, when applied to learning something new to improve yourself.

3. Invest in educating yourself on subjects you’re passionate about, you can also invest in a mentor to guide you towards your goals. Mentorship is pivotal for growth! We don’t know what we don’t know! The mistakes in trying to figure it all out on our own, or without the proper education and be costly and time consuming. Sometimes; at least in the beginning we need all the help we can get. Learning the process is not fun, but with the proper mindset and guidance to see what’s ahead makes the journey less scary and risky.

4. Start your own business, start a business with your refund check. The path to wealth in America is Business, Realestate and Stocks. Use your money to create extra income or add to the flow of your current income. We all have amazing ideas to build a business, however we don’t have the courage to pursue the ideas for that business or to bring the product to market. A refund of $3,000 is a great start to any business.

5. Save your refund as an emergency reserve fund! I believe people underestimate the value and peace the comes with an emergency or reserve funds. There was a study that suggested making small financial decisions when you don’t have reserves, weighs just as much as major life events. The study concentrated on the effect of small cash decision on 2 different people. One person with $1000 in reserves and the other with $250 in reserves, they each had $150 worth of car repairs. The person with $1,000 in reserves, had no stress about this small cash transaction. The person with $250 in reserves of course was stressed about making this small cash transaction. After making this decision he was stressed and unable to make good decisions for the rest of his day.
Think of an emergency fund as a buffer! The goal in having an emergency fund is to take care of your financial burdens when your cash is otherwise low. It gives you several months of bills paid and you will not go into full stress mode about your survival. You are more liable to make better decisions when you have a clear and stress free mind.

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