Yes, it’s the most stressful time of year, when people are scurrying around to gather their W-2s, 1099s, etc. along with a mountain of receipts only to dump them in the hands of some poor tax preparer to sort thorough the mess and figure out if there’s a refund owed to the person. Most of you make a vow to your tax preparer, that NEXT year you will be a lot more organized and you will have your information organized but you never do.
Some people are eagerly awaiting their tax refund because they’re going to use the money to help catch up with bills, especially if they live in a state with high taxes like Illinois. Some people will use that money to help them buy a new car, furniture, pay for education, etc. All these reasons are great but one thing to think about is: will any of these choices help position you into a stronger financial position for you and your family?
Paying off debt and paying for education are some of the best ways to spend your tax return money. The less monthly debt that you have, the more money you have in your pocket each month. The ultimate goal is to be debt free but you don’t want to close out your credit cards once you pay them off. You might need them in case of an emergency and it will lower your credit score.
How about using your tax return to buy a condo, home or investment property? I know many people are nervous about the new tax plan but guess what? Things change all the time and none of those laws are set in stone. Also, if you buy a home in an area that is increasing in value, you might be able to sell your home for a profit in a few years. That will be a nice check for you at closing which you’ll be able to reinvest it in your business or more profitable means.
Whatever you do with your tax return, just make sure you’re using your money to help put you in a power position. Each year we should be making financial gains to help us live out our dreams. It won’t happen overnight but each step that you take will get you closer to your goals.
Written By: Shena Omotola, Dream Home Specialist & Broker Owner of Skyward Realty – Skyward Realty services Chicago, Suburbs, and Northwest Indiana
P.S. Feel free to email me any questions. I’m always here to help. Shena@SkywardRealty.com