Fund Your Emergency Expenses
To put yourself in a strong financial position, put your refund cheque into your emergency savings account. This special savings account will allow you to cover any expenses in case of an emergency, such as being laid-off from work or faced with unexpected medical bills.
Invest in Real Estate
If you don’t yet own your own home, but would like to some day, now is the time to start working toward that goal. If you have already taken a loan, paying off or reducing your principal amount early can help you save money in interest. Check with your lender to see what early payoff options are available under your loan terms.
Pay off debt
If you have high-interest credit card debt, putting your tax refund cheque towards paying it off will likely give you greater returns than any other option. That’s because when the balance you owe to credit card companies goes down, the interest or finance charges you have to pay on that debt also goes down. Depending on your interest rate, you’ll be saving anywhere from 10% to 29% per year in interest on any portion of your balance that you manage to wipe out.
Save for Retirement
If your credit card debt is non-existent and you’ve got several months worth of living expenses saved up, consider yourself ahead of others. To strengthen your financial position even further, consider putting your tax refund cheque into pension schemes like National Pension System (NPS) and Public Provident Fund account.