If you're one of the lucky citizens getting money back this year from taxes, I challenge you to make an investment with your new-found cash that has the potential to pay off big in dividends for years to come.
I know what you're thinking and, no, I'm not solely recommending stashing your new found cash away in some low interest savings account, treasury bond, or dividend stock. While those can certainly be beneficial, my prescription this year is also a little more outside the box.
In today's iffy economy and pathetic savings environment, many people with a little excess cash are finding it harder to get a return on their investment. However, rather than getting discouraged by these market conditions, try looking at yourself as the biggest investment to make with a tax refund this year.
Investing In Yourself With That Tax Refund
From investing in your personal health to revitalizing a lost hobby, there are many ways to make investments with both your time and money that can pay off big in long term benefits.
1) Investing in your health – Investing in a gym membership, a healthy cooking class, or even some new running shoes can pay vast dividends in the long run to not only your health but your wallet as well. People who eat healthier, work out more frequently and generally live more active life styles are also shown to have more energy in the work place. As Newton famously stated, “an object in motion stays in motion,” and this applies to our bodies as well. Try attending a gym during your lunch or early morning hours and see the difference in your energy level post work out. Perhaps you'll have the extra motivation it takes to tackle more in the workplace or even start a side project at home!
2) Invest in your mind – Take a class or hire an instructor on a subject you've always been interested in. Whatever it may be, you'll certainly garner results so long as it coincides with a passion of yours. Whether you're learning a new skill that has the potential to pay dividends in real dollars or simply in new knowledge that can't be directly monetized, it still stands to give you an enlightened perspective and a more well-rounded life.
3) Rekindle a lost hobby – A friend of mine majored in applied arts many years ago before making a 180 degree turn into business upon graduation. Just this year she recently began painting again after taking a multi-year hiatus. After just over 3 months of jump-starting this old passion, she had created a piece she was offered several hundred dollars for. Since then she has go on to sell several other pieces and has found a whole new level of fulfillment in life. Do you have a lost hobby or interest? If so, perhaps your refund check can help jump start this lost passion!
4) Building a rainy day fund – Investing in some sort of emergency fund is the ultimate way to hedge against future financial disasters. While I put this at number 4, it should probably fall to number 5, as paying down debt (see below) should be handled before building this fund. A rainy day fund sets yourself up for future financial success in ways that may not be imaginable now. Have you ever come across an investment opportunity or a period of financial distress in which a few extra bucks could have gone a really long way? Of course, we all have. And these funds should be specifically designed for those sorts of situations.
5) Pay down debt – While obviously the most boring on the list, there is no way I can make recommendations on using money wisely without giving it a mention. Whether it be a hefty credit card balance, auto loan, or even a mortgage, paying down debt with some new found cash is never a bad idea.
What's your suggestion of what to do with your tax refund this year?