How to Spend Your Tax Refund This Year

I’m almost ready to file our taxes this year, and it looks like we’ll be earning a nice fat refund. It’s not always easy to know what we should do with the refund money though – do you blow it all or be responsible with it? The short answer is that you should incorporate both options, but be smart and know your limits. Here are some ideas on how to spend your tax refund this year.

Give Yourself Some Spending Money

We all know that the responsible thing to do is to save the money or to pay off debt but you also do need to be able to have some fun. You worked hard all year round, some of that refund money should go towards helping you to blow off a little steam.

Set aside a portion of the refund money to spend on anything that you want and ditch the guilt. It could be 10% or 50%, it all depends on what your financial goals are. If you are always responsible with your money, you’ve likely put off some wants so that you can hit your savings goals. You have to plan for the future but also have to live in the present. You cannot put off having fun forever.

Finance Your Dream

Perhaps you have always wanted to visit Italy or would love to take a cooking course. Using your tax refund as a means of funding your dream is really great for your soul. Think about it for a minute – 10 years from now will you regret not putting more effort into making your dreams come true? If the answer is yes, consider using your tax return accordingly.

That said, you should look at something that has some degree of importance to you – something that you ordinarily would not have been able to do. A trip to Italy, for example, can be a once in a lifetime experience. Who knows what your circumstances will be in 10 years time – you have to live in the present as well.

Improve Your Financial Future

There is something to be said for using your tax refund, or at least part of it, to help build a better financial future. Using it to shore up your emergency fund is a great way of doing this. If you’re behind on your retirement savings, get a head start on your Roth IRA for this year.

There are many good investment options out there. Take some time and do your homework and you’ll thank yourself later when you check your investment accounts.

Use It To Reduce Everyday Living Expenses

Using your refund for maintenance projects that you have been putting off can pay great dividends in the future. Take your car, for example. Having it serviced allows it to run more efficiently overall and this can save you in gas costs and repairs. You can also have an energy audit conducted in your home to identify what appliances are “gas guzzlers” in terms of power. Consider replacing appliances for ones that are more energy efficient in order to save money every single month. A one-time expense now can pay dividends down the road.

Overall, your refund should be used to improve your life – whether that means using it to have fun or using it to bolster your nest egg. Take a few minute to consider what will have the best impact on your life.

How are you spending your tax refund this year?

The Case For Shopping Exclusively Online

According to a study conducted by PWC, around 72% of respondents surveyed considered themselves either experts or confident when it came to researching different products and shopping online. According to statistics from Forrester Research Inc, about 70% of the growth in terms of online sales in 2010 could be attributed to existing clients switching to online shopping as opposed to utilizing retail outlets.

What becomes clear from these studies is that online shopping is becoming a more popular option. PWC theorize that this is due to advances in technology – the increased uptake of smart phones and tablets makes online shopping much more convenient.

Can a case be made for shopping exclusively online then? It would seem so. Here are the top three reasons why people prefer shopping online and why it could pay you to shop exclusively online.

Being Able to Shop at Any Time

Punters often cite cost savings as the primary reason for people to choose shopping online. According to the PWC study though, the top reason respondents chose for choosing online shopping was actually the convenience of being able to shop whenever they wanted to.

This makes sense – as a society, we are busier than we have ever been before and time is more precious than ever. It is no longer unusual to put in long days at the office or to work odd hours. Online shopping allows us to shop at any time of the day or night. There is no longer any need to rush out during your lunch break or rush to get to the store before it closes. You can relax a bit, take some time to research your options and shop whenever you are ready to.

Better Prices

Coming in a close second to convenience, better prices also prompted respondents to choose to shop online. There are several ways to save when shopping online – you can research different deals with a few clicks of the mouse and find the most up to date special offers and the most competitive pricing.

Deal-of-the-day websites such as Groupon allow shoppers to make significant savings when purchasing goods or services. It is not uncommon to save more than 50% with Groupon offers. For example, there are 40 Groupons available for Home Depot, which can mean big savings for you.

Then, of course, there are very real savings in terms of cutting back on impulse purchases – it’s simple, retail outlets go to a lot of time and effort to encourage impulse buying. Online shopping is more like a surgical strike – you search for exactly what you want and get to avoid having being tempted by great displays.

Quicker and Easier Than Visiting Stores

Another reason that respondents cited for choosing to shop online was that it was quicker and easier than visiting a retail outlet. When shopping online, you can avoid fighting your way through heavy traffic, battling to find parking and having to wait in long queues.

You can shop from the comfort of your couch instead of having to face the hordes at the mall. You can get what you want in a matter of minutes, rather than having to embark on a shopping expedition.

Add in that you are likely to be able to access a better range of products, home delivery and the fact that it is so much easier to compare deals and it soon becomes obvious that shopping online can save you a lot in terms of time and money. It definitely pays to shop online.

There’s No Shame In Switching Jobs

The media loves to run trend pieces about how millennials are allegedly worse than other generations in some respect. According to these articles, millennials change jobs more often and are less loyal to employers than people in other generations. Writers present a past filled with workers who dutifully stayed at the same job for 30 years and then negatively discuss millennials who not only job hop, but refuse to walk miles each way uphill for their respective employers.

These articles are mainly lazy garbage, but at this blog, we love to debunk garbage!

The Facts about Job Changes

Contrary to popular myth, people have longer tenures with companies than in the past. At 4.6 years, job tenure in 2012 (the last year for statistics) is actually longer than it was in 1983. Longevity on the job increased across age groups in the aftermath of the recent recession.

Another notable fact is that relatively frequent job changes are commonplace for young workers. A Bureau of Labor Statistics study found that later Baby Boomers (born between 1957 and 1964) held an average of 11.3 jobs by age 46. Job changes appear normal for young workers in general, not millennials in particular.

Changes Make Financial and Career Sense

Modest income growth has been the norm in recent years. Raises only averaged 3% in 2013 and 2014. If a person negotiates a raise of 5% or more at a new position, that individual just noticeably increased his or her take home pay. This fact provides an incentive for people to change jobs.

Millennials in particular need to consider job changes in order to improve their financial situations. It takes millennials 4 years longer to reach the median income for the country than it did their older baby boomer counterparts. The weight of slow income growth is an actual trend, not an exaggeration, and people need to be aware of and react to in their best interests.

Another rarely discussed fact is that people are not rewarded for a long tenure if they have to go out in the job market again. New employers simply do not view it as a good sign. They might wonder if the applicant became complacent career-wise and failed to keep his or her skills up-to-date. If a person fails to achieve a promotion after four years with any employer, it is a good idea to push for one or look for more lucrative opportunities elsewhere.

People Responding to the Job Market

While journalists point to the small percentage of people with long careers at one employer, the facts indicate that those folks were always an anomaly. Most people did not experience stints of 30+ years at a single company. People changing jobs numerous times, particularly when they are under 46, is the long-term norm, not a new trend.

All of this information points to a conclusion that millennials are assessing their work situations and making changes like their predecessors. If anything, people today are perhaps too loyal and need to consider more changes to combat slow income growth. Millennials need to ignore stories that amount to little more than “kids these days” and take a hard, objective look at how to grow their incomes in such a challenging environment. A job change is likely the sensible solution.