Tax return time is almost right around corner! For middle-class families tax season is probably more exciting than Christmas (after all we get a chance to replenish our wallet instead of emptying it for once). We get a chance to pay for some of those needs and repairs we have been putting off and perhaps indulge in a few of our wants.

But is there a way to make that tax return money not only make your life easier for a month or two but all year round?

The answer is YES!

Every tax return season my husband and I always try to at least do one two or things to make our lives easier after taking care of the needs we have been delaying and leaving a bit for “fun” money. Over the years we’ve tried a few different methods and these are the ones I’ve found made the biggest difference!

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Set Up an Emergency Fund

 

If you are familiar with Dave Ramsey you probably know that his first “baby step” is setting up an emergency fund with one thousand dollars. This is great advice because life happens!

If you are strapped for cash whenever ER trips or a flat tires happen, you are far more likely to put it on a credit card which will cost you more in the long run. So set aside a set amount from that tax return as an emergency fund you will ONLY touch in actual emergencies!

 

Pay Off Debt

 

The average US household has A LOT of debt. To be more exact, Nerd Wallet estimates that each US household carries almost seven thousand dollars of revolving debt. So while it is extremely unlikely you can pay off all of your debt with just your tax return, you can definitely make a dent!

There are 2 common methods:

1) The Snowball Method: Pay off the accounts with the lowest balances completely. Then  to keep the momentum going apply the minimum payments from those to the next lowest amount of debt until that is paid off as well. Keep rolling over payments until all of your debt is completely gone.

2) Rank debts by interest rate and pay the higher interest rates first. Money lent at a 28% APR is going to cost you more than one at an 18% APR so by paying off a higher interest rate card you will save more on interest in the long run!

 

 

Get Ahead on Bills

 

If you are in the habit of waiting until your due dates (or maybe even past them), use your tax return to break that ugly cycle! Pay all of your bills at once and maybe even pay a few months ahead on the bills that will allow it (like HOA dues some phone plans).

 

Pay for Monthly Subscriptions Upfront

 

We all love Netflix, Sling TV Hulu, Ipsy, and our other various monthly subscriptions, but did you know with some monthly subscriptions you can save BIG by paying for a year up front? So look into the subscriptions you already pay for every month and see if there are some dollars to be saved!

Even if there aren’t deals for pre-paying, simply paying upfront when you HAVE the money can ease your month to month commitments and free up some of your budget between tax seasons.

 

Stock up on Groceries

 

Nothing is worse than coming home from work to an empty fridge ESPECIALLY if your bank account is equally empty. So stock up on some long-lasting essentials like broth, canned vegetables, frozen food, meat that is on sale that you can portion and freeze, and even consider making homemade freezer meals (which can also help you save money by reducing food waste in that you won’t have a half an onion you don’t know what to do with).

 

Buy Gift Cards

 

Unfortunately I’m not talking about gift cards to your favorite clothing stores, but if you are living on a lean budget most of the year consider buying 12 one hundred dollar gift cards to your favorite grocery store. That way you KNOW if a paycheck is short or life happens you have a little cushion every month for groceries and thing you NEED.

 

 

Stock Up on Essentials

 

If you watch your budget as closely as I do you probably know that with the exception of a few REALLY good couponing deals buying bulk is one of the easiest ways to lower the cost per roll of toilet paper or get the cheapest price per fluid ounce when buying laundry soap. But often when living paycheck to paycheck the idea of walking into a bulk store and spending 20 dollars on paper towels alone is enough to make you cringe or is just simply impossible. So use your tax return to go out and buy in bulk and don’t forget to combine with coupons to get even better savings.

 

Invest in Yourself!

 

Saving money is GREAT, but managing to successfully use your money to make more money is even better!

I started this very blog at the end of March last year. I used part of my tax return to purchase a reasonable hosting plan and my domain from Bluehost, purchase a theme, and get set to make my own income blogging from home. At this point not even a year later I have made back every last penny I initially invested and then some! With a lot of hard work and nurturing my blog has grown amazingly well and I am now making what I initially invested times 6 EVERY MONTH and it’s only going up from here.

 

So if you have ever considered running a blog go out and at least try! The investment you will make is SO much smaller than any other self run business, and it is probably the LEAST EXPENSIVE purchase you will make with your tax return.

Maybe blogging isn’t for you, but you have debated opening up an Etsy shop  or craft shop every time you walk through your local mercantile. Make a plan, commit to that plan,  then use a part of your tax return money to go out and get the Cricut Explore Air™ 2 machine you’ve always dreamed about, wood working tools, or whatever else you need to get started.

 Believe in yourself and go for your dreams, because you never know where you could be next tax season if you use part of the money this year to invest in yourself.

 

Go Green

 

Going green often isn’t just good for the environment, a lot of the time making some wise eco-friendly modifications to your home can leave some extra cold hard green cash in your wallet. So while you have a bit of disposable income why not use it to make a few cost-efficient updates to your home so you can save on electric and water bills for months (or years to come)

A few of the most cost-efficient green recommendations to save on your utilities:

– Replace your lightbulbs with LED lightbulbs. They tend to last longer, use less electricity, and are better for your environment and your wallet over time.

– Install low flow shower heads to reduce the amount of water your children go through during their 15 minute showers.

 

 

– Replace the weather-stripping on your doors and windows to save on electricity costs by reducing how much air conditioned air is escaping your home.

– Install sink water aerators to reduce the flow of water through your kitchen sink.

– Install a programable thermostat to have more efficient control of your heating and cooling throughout the day. Bonus tip: Sometimes your electric company will help cover the cost of one!

 

Get a Car Check-Up

 

Raise your pinky if you’ve ever realized you needed new tires but didn’t know where you were going to find the money?

If you didn’t you are doing a lot better than I have at times. Which is why at tax return time I now use part of the money to get a car check-up and find out how much life I have on my tires, what parts need to be replaced and when, and if there are any issues large or small that need to be addressed, while I actually have money to address them!

Cars are important for the vast majority of American families. In areas without public transport they are the only way to get to work, pick the kids up, or even go to the grocery store. So depending on your situation your car’s health might not be something you can afford to ignore.

 

 

Address Healthcare Needs

 

It’s been a lot longer than it should be since I’ve had an annual physical and I KNOW I have dental issues that need to be addressed. Unfortunately due to lack of time and funds these things just keep getting pushed to the back of the priority list. I know the same is true for so many families and especially true for so many moms out there.

So use part of this lump sum to get to the doctor even if it means hiring a babysitter. Go to the dentist. Even if you can’t budget to have ALL the work done now make a plan to piece it out as you can.

The issue with health and dental issues is they compound and only get worse the longer you wait. High blood pressure can be easily managed IF you get there early enough, but over time that same condition untreated can do substantial and sometimes irreparable damage to your body. The same goes for dental work. A cavity being filled isn’t fun and isn’t free but it’s so much better and less expensive than the root canal or extraction you will be needing if you wait.

 There is only ONE of you and your family cannot afford to live without you. So use part of this money to take care of YOU.

 

Get Ahead on Student Loans

 

A lot of us have them and at this rate will have them for a LONG time. But if you can forgo the other items on the list and apply all (or a large portion) of your tax return to your student loans you could have them paid off in years instead of decades. Plus paying them off early or even a chunk can save a lot on interest which makes them more manageable.

 

Pre Buy Gifts

 

This is by far the LEAST important thing on this list but sometimes you can save big money by shopping sales or discount sites that often have longer shipping times for gifts. Birthdays, anniversaries, and holidays happen every year and you can take a big heap of stress off your shoulders and save some money by using this money to start a gift stash you can pull from throughout the year.

 

Tax return time is often the biggest influx of money most families get in a single year. It can be exciting and it can be oh so tempting to give into those wants you have delayed all year but with a little bit of planning and smart budgeting you can make that tax return work for your family and put you in a better position ALL YEAR LONG.