If you filed your taxes on time yesterday (which we're sure you did) then you are most likely expecting some sort of tax refund. Almost two-thirds of Americans who file their taxes get some money back from the government and this year, the number has gone up thanks to new tax breaks instituted by President Obama's administration. In 2007, the average tax refund was $2,300—that's a sizeable chunk of change chicas and we decided to help you spend it.
Sure there are a bunch of responsible things you can do with your refund and we've got you covered if you want to go the practical route. But every now and then it feels good to help yourself to a special treat. So, go ahead, indulge yourself...
1. Tax Return: Credit Cards
Pay Back Debt
Pay down you credit card debt with the money the good ol' US of A is handing you this year! Keeping your debt to credit ratio low is a key component to maintaining a good credit score. Be sure to check out our other simple tips on how to improve your credit score.
2. Tax Return: Louboutin
Make like J.Lo and go out and buy yourself some Louboutins, girl. OK, it doesn't have to be a pair of red soled stilettos, but the point is, spend some of this windfall on something that you've been coveting for a while and wouldn't normally be able to afford. Believe us, you're worth it!
3. Tax Return: Rainy Day
Save for a Rainy Day
Did you know that everyone should have enough cash saved up in a rainy day fund to cover all basic living expenses for about three to six months? Yeah, neither did we! This emergency fund should be kept in an accesible account, but once you put money it it, you CAN NOT touch it unless you face an unexpected financial emergency. Your tax refund is a great way to kick-start a rainy day fund!
4. Tax Return: College
Back to School
You're never too old to go back to school, and in this economy a little extra education definitely doesn't hurt when you're looking for a job. Whether you're working towards a PhD or finally getting your Bachelor's degree, it doesn't matter! Learning is always a good investment in the future.
5. Tax Return: Retirement
Invest in Your 401K
The government could not make it easier to use your tax refund for your retirement fund. If you qualify, you can have the IRS directly deposit your income tax refund straight into your regular or Roth IRA! This might not be the sexiest of options, but it definitely could be the smartest.
6. Tax Return: Travel
Take a Trip
What better way to expand your mind, and your horizons, than traveling? Pack your bags and fly off to an exotic locale you've been dying to visit (but have put off cause of lack of funds). The one thing you will never, ever regret spending money on is a well-planned, well-deserved trip. So go ahead and get your groove back!
7. Tax Return: Dance Class
Bust a Move
Have you always wanted to learn how to dance a mean salsa or sexy tango? Well, this is your chance. Invest some of that money in dance classes. It's a great way to meet new people and learn a culturally significant skill that will boost your confidence a thousand fold. Go on, shake that bon-bon!