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Invest Your Taxes

Flipping your tax refund for a better investment

Its my money and I need it now!!

With the government shutdown putting a lot of people out of temporary work and sending the American people in an uproar, having money saved for a rainy-day is imperative. There has been some talk about another economic depression and its always better to be prepared. Tis the season of investing. What better time to invest and save other than tax time? Ever thought about being your own boss? Want to make extra money without working like a slave? Do you have a goal to increase your credit score? Here are some tips on how to spend your tax refund responsibly and invest in yourself.

1. First thing first, get ahead of your cash flow by paying all your monthly bills. If you have enough to get 2 months ahead on your bills than go for it. If you have a steady income this will give you a chance to balance and invest more in your savings, which brings us to the next step….

2. If you haven’t already created an emergency fund for a rainy day. Dave Ramsey says invest $1000 into your emergency fund to start. If you already have one add to it and keep stacking. This is very helpful as the name speaks for itself. For any unexpected expenses that are not in your monthly budget the EF will help you stay afloat. Whenever you take out of your emergency fund you remember to replace no less than what you took out. If you want to challenge yourself put back more than what you took out. Having an emergency fund is like having an umbrella on a dreary rainy day. You maybe wearing sandals but at least you are covered. Stay ready so you never have to get ready.

3. Create a Sinking Fund. A lot of people are unaware of this saving strategy but this is a great technique to use when you have personal financial goals you want to complete. Like an emergency Fund, a sinking fund is created for you to save for something specific. This is a great strategy to use if you are planning a vacation, have a goal to buy a new car, or even saving for Christmas. This could even be used if you have maintenance repairs you need to fix. It keeps you from going into your emergency fund while being prepared for other things. Now this is a fund you want to utilize for possibly a long term goal, just to give yourself time to save up.

4. Invest for multiple incomes. We are in a time were entrepreneurship is a wave. Although entrepreneurship may not be for everybody, for those of you who have a vision that you have been putting off for years, now is the time to take the risk. According to SBA 627,000 new businesses open each year. You don’t have to invest in a fortune 500 company but something small that will accumulate more income is a start. Even the real estate is a great investment.If you don’t think starting a business is apart of your goal, invest your money in a Roth IRA (Individual Retirement Account) at your place of employment. Yes invest in your retirement savings account. Although this is a long term saving investment it will pay off in the long run. Invest in stocks and bonds, first We recommend to do your research on the types of stocks and what they do.

5. Pay off debt. Getting out of debt is guaranteed to be on everyone’s New Year Revolution list. If that is you, self-discipline is key to completing this goal. Make a list of your debt amount from smallest to largest. Completely pay off your smallest debt first and work your way up.  Consider Dave Ramsey Debt Snow Ball Method as these tips will help you attack your debt head on. The total American debt today is at its highest record of credit card, auto and student loan debt. A 2017 CNBC article revealed that over 157 million Americans have credit card debt to pay off and 44 million have an outstanding student loan debt. Paying off debt means building, repairing and increasing ones credit score.

Honestly if you follow all 5 of these tips you will be on your way to increasing your credit score by paying off debt, staying current with your bills and not getting behind or missing a payment.  There are times a financial crisis visits us when we least expect it. Having an emergency savings fund will help keep you afloat on those dreadful rainy days. Being financially discipline will help you invest in your business more responsibly. Lets face it having a good credit score is equivalent if not better than having cash. So invest in savings and yourself.


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