As Tax Day falls on Monday, April 15th this year, chances are high that you’ve already completed your taxes for the 2018 fiscal year and are awaiting your tax refund money. Although there were some early reports that tax refunds weren’t as high this year as in years past, more recent articles have found that many people have received more tax refund money this year.
And although some people might feel the urge to use the refund to buy a new TV or plan a vacation—being fiscally conservative with your tax refund money could set you up for greater financial success in the long run. As a caregiver, it can be crucial to maximizing your tax refund in order to find greater financial success throughout the next year.
How To Maximize Your Tax Refund
There are many financial responsibilities you face as a caregiver for an aging loved one, and caregiving expenses are often one of them. If you will be receiving tax refund money this year, here are some of the best ways to use that tax refund:
Pay off existing debt. Whether you want to pay off credit card debt, a car loan, or make additional mortgage payments, choosing to use your tax refund money to pay down your debt is a smart move that will provide you more financial freedom in the future.
Contribute to an emergency fund. A study by Bankrate.com had shown that more than half of Americans do not have enough money saved to cover an emergency cost of $1000. Since the average tax refund this year is $3068, even choosing to put away half of it towards an emergency fund will get you ahead of most Americans, and prevent you from panicking in a financial emergency.
Put money into your retirement savings. One of the best ways to use your tax refund this year is to put more money aside for your retirement. Even if you already have a 401k plan through your job, you can still open an IRA account and contribute up to $6,000 per year before taxes.
Make home improvements that you’ve been putting off. If you’ve had your eye on a new dishwasher or refrigerator, maximize your tax refund and make an investment in something that will improve your daily quality of life. You can put new paint on the walls, upgrade your bathroom accessories, or improve the landscaping in your yard, all for under $1000. Not only will it make you feel better, but it will also increase the value of your home should you choose to sell it.
Invest it. Using your tax refund money to invest in the stock market may seem risky, but if you work with the right investment manager, they can help you make informed decisions that could have a big pay off when you are ready to retire.
Of course, spending your tax refund money on personal indulgences can be fun, too, however, with people living longer and health care expenses on the rise, finding ways to maximize your tax refund now can go a long way in the future.
Give Yourself The Gift of Time
Another possible way to utilize your tax refund money is to purchase a medical alert device for your loved one. It can often be overlooked, but medical alert systems can provide you with the peace of mind of knowing that your loved one will be able to connect to help should an emergency occur in your absence. It takes pressure off of you as the caregiver to provide constant care for your parent, giving you both the freedom to live more independent lives. What could be a greater gift than that?