Investing your refund does not mean you can't keep any to splurge on something fun. Be smart and give yourself financial freedom, while still enjoying the extra money.

Edrie Pfeiffer
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Edrie Pfeiffer, Bankruptcy & Divorce Attorney

It's that time of year again! Those of us lucky enough to receive a tax refund have been looking forward to the extra money providing a little financial relief, and maybe pay for some much-anticipated fun... a vacation perhaps? Maybe a full spa day! Or a new wardrobe! Or a new car! The possibilities are endless!

You may have also heard people talking about "investing" their refunds, and you immediately think about stocks, and bonds, and Wall Street, and your brain starts to shut down. It's very intimidating and sounds like your money could just disappear. Investing your refund doesn't have to be scary though, and the BEST part is you can still have fun if you plan for it! Here are a few tips for smart, easy investments that will give you a little extra financial breathing room and still leave some leftover to enjoy.

1) Make an extra mortgage payment. Depending on the length of your loan and other variables, making 1 extra payment per year could shorten your mortgage by up to 4 years. That's a lot of extra vacations to look forward to!

2) Pay off a loan or service. If you are nearing the end of your car loan, student loan, furniture loan, etc. and you are receiving a sizable refund, pay off the remaining balance. Are you making monthly payments on an attorney service, small business advisor, dog sitter, or even daycare? Pay them upfront for the remainder of the year so you don't need to worry about it again. Just 1 less bill could give you enough money to take your family out for dinner more often, buy that handbag you've been eyeing, or do those home repairs that have been put on the back burner. Many companies may be willing to give you a discount for paying the full year in a lump sum. Another savings!

3) Treat yourself to something. Do one of the things mentioned above, but leave yourself a little leftover for a special treat. Whether it's a new outfit, dinner at a new restaurant, or just splurging on something you don't normally have, give yourself a reward for being responsible with the rest of your refund!

4) Take control of financial problems. Last but not least, if you are having financial difficulty and the bills are just too overwhelming, consider using your refund to pay for a bankruptcy. Bankruptcy can give you the relief you need to enjoy your life again without constantly wondering when the next creditor is going to call. Remember, our attorneys have helped thousands of people in situations just like you. We want to give you that relief and a fresh start in life. Contact us for a free consultation to discuss your options and see how we can help!

If you are receiving large refunds every year, you should consider adjusting your withholdings to have less taken out for taxes. Then take the additional money that you receive in your normal paycheck and put it into some type of savings account. While your refund will be lower, you will earn interest on the money that you put in to savings so you will actually be getting more money.

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