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April 15th has passed, so you’ve hopefully already filed your tax return. If you’re expecting a tax refund, you have a decision to make: what are you going to do with the extra cash once it arrives?
For some people, it means paying off debt, but if you’re debt-free, you might be looking for ways to use your refund to make money. Keep reading as we explore money-making ideas for this year’s tax refund.
1. Invest For Retirement
With the stock market just off its record high, it’s difficult to bet against this momentum continuing through the November elections. Start by looking at your IRA and 401(k) accounts. Are you on pace to max each of those out this year? If not, that could be a great place to invest your refund. If your employer matches 401(k) contributions, you want to make sure you’re at least investing enough each month to receive the matching contribution.
2. Invest in the Stock Market
If your retirement accounts are in good shape, consider investing your refund in the stock market. You can invest in individual stocks, mutual funds, and ETFs through a taxable brokerage account. Unless you’re an experienced investor, investing the money into an ETF that tracks the S&P 500 or another index will be the safest idea. This will provide you with some diversification if the stock market loses some of its steam.
3. Grow Your Side Hustle
If you’ve been working on a side hustle, your tax refund might be an excellent opportunity to try and grow it into a full-time business. For example, maybe you’ve been designing and selling jewelry at markets. If you can’t make enough products to keep up with the demand, you could use the refund to hire someone part-time to help. Or maybe your side hustle includes baking. There might be a piece of equipment you’ve had your eye on that might now be affordable.
4. Start a College Fund
If you have children or grandchildren and they don’t have a college fund yet, this is a great time to start. By investing in their future, you could help reduce the amount of student loan debt they will have, giving them a headstart financially. Some states will even offer you a tax deduction for 529 contributions.
5. Start a Home Renovation Project
Do you have a home renovation project you’ve been putting off because of the cost? You can use your tax refund to get started. However, ensuring the project will pay back a return is essential. Simple things like painting your home or boosting the curb appeal with landscaping can be inexpensive but are a great use of cash.
6. Go Back to School
If you’ve been considering returning to school to get a degree or further your education, your tax refund would be a great way to help pay for the tuition. By taking this step and investing in yourself, you could end up on a path to a higher paying job.
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Source: 6 Money-Making Ideas For Your Tax Refund
