If you are a single parent, you understand that tax time can be frustrating. When you have children and are divorced, you will most likely be taking turns when filing taxes. This can be irritating as you have to file differently every other year and your income tax refund will fluctuate. When it is your turn to claim your child as a dependent, you can receive several thousand dollars back based on the amount you bring in. Once the return is received, the question becomes, how do you spend your money?
There are basically three options to consider; spending the money, investing the funds or saving it. Normally, most people blow through it within a few days and are left with little to show for it. It is important to consider the options for your income tax refund to get the most out of the money you have worked hard for.
If you must spend the tax income money, consider what you are purchasing. Many households tend to use the money for a new couch or television. While these items are enjoyable, consider if you really need such new things. You may find your money is better suited elsewhere such as a new refrigerator or to repair your vehicle. Really consider what the money could be used for before you go making big purchases.
Investing is a subject that most individuals do not have experience in. For most people, investing is something they are interested in but have no idea where to begin. Consider speaking with a financial consultant and learning how you can take the refund you receive and begin to make money from the amount. You will find several options are offered, from the stock market to CDs and interest earning accounts.
Most people do not consider saving the income tax refund once it is received, though this can be a good choice. It is smart to have a cushion to go to when a major expense arises. Imagine having your car break down and it will cost $1,000 to repair. If you have been saving your tax refund, then you should have several thousand dollars in a savings account in which you can use to make the repairs without stressing over where the money is coming from. Saving can help you to have this cushion or you can look towards a bigger goal, such as saving for a home or a vehicle.
Think wisely when considering what to do with your income tax refund. You will be glad you took the time to make the right decision.