Using Your 2022 Tax Refund Wisely

Woohoo! Tax season is upon us and Americans everywhere are not-so-patiently waiting for Uncle Sams’s tax refund for 2022. Are you running high on ideas for how you should spend your tax refund? We’ve got plenty to share that will help save you money in the long run. 

Here are some ways to spend your tax money wisely this year! Our number one tip? Don’t spend it all at once!

  1. Prepare to Purchase a Home

    While your tax refunds probably won’t be enough to purchase a home outright, you can still use your tax refunds from 2022 for a down payment on a home. The real estate market is competitive right now, so every dollar helps to get you closer to collecting the keys to your dream home. If you are a first-time homebuyer ready to make a move in the market, we’ve got great news to share! Governor Whitmer signed a bill to establish the First-Time Home Buyer Savings Program. 

    What does that mean for Michiganders?

    This program will allow families to open first-time home buyer savings accounts to save for and purchase single-family residences in Michigan. In addition, any associated contributions, interest accrued, or qualified withdrawals from an account will be exempt from taxation. 

  2. Pay Down Debt

    Carrying a credit card balance with you in 2022? Don’t forget about interest compounding month-to-month. Use your tax refund to pay down those credit card bills to avoid costly interest accruing! Think of your tax refund as a raise. Use it to start paying down debt to allow you more purchasing freedom in the future. Most financial experts agree to utilize no more than 35% of your available credit (for example, no more than $350 balance on a $1,000 limit).

  3. Create an Emergency Fund

    What would you do in the case of an emergency? The sad reality is most Americans don’t have adequate funds saved up in the event an emergency strikes. A dried-up emergency fund will put you in a vulnerable position. A great way to use tax refund money for 2022 is setting up – and maintaining – your Emergency Fund account. 

    Plan to have at least three to six months’ worth of expenses saved in your emergency fund.

  4. Invest in Yourself and Your Skills

    It’s true, you need to spend money to make money. Consider using your 2022 tax refund to build new skills in your industry or take time to hone in on a new one! At Moayyer Real Estate Group, we are firm believers in continuing education. Tony and April both stay busy sharpening their skills to know the local market, anticipate changes and evaluate trends. 

    In fact, April recently completed training to receive her award as a DEFI Advocate (Diversity, Equity, Fair Housing, Inclusion) on behalf of the Equal Opportunity & Diversity Advancement Task Force. This specific accreditation and training will help to ensure that each person who dreams of homeownership will not be denied due to race, color, religion, national origin, sex, or disability. If you could start one course, what would it be? Bring your answer to google and start learning!

  5. Start a Business

    Your tax refund can be the tool to take your Entrepreneurial ideas to the next level! Take your side hustle and make it official this year. Wanting to dip your toes in the waters of Real Estate? Check out our Blog, How to Get Started as a Real Estate Agent, or reach out to Tony or April to learn what it’s really like behind the closing day pictures and smiles. 

  6. Investment Account Savings

    Send it to savings! Along with your Emergency Fund, making an investment in your savings account will provide a greater cushion as you cruise into the year. Here’s a tip from the expert at TurboTax: “​​The IRS allows you to split up your refund into up to three accounts via direct deposit. That’s a perfect opportunity to stash some funds in a savings account that’s inconvenient for you to access, assuring that the money stays out of sight and out of mind until you really need it.”

 Remember, don’t spend your 2022 Tax Refund all in one place!

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