If you are thinking of buying a vehicle this spring or did during President’s Day Sales at your local car dealership, well you aren’t alone.
There has been a growing trend towards new and used cars being purchased during President’s Day weekend up through March. Many have accounted this trend to the tax refund period. Many are doing their taxes in January and February, and with that money, they are using it as a down payment on a new or used car.
Some other popular ideas on what to do with your tax return are:
Seed your own business startup – this is an option for those that have an actual plan. Starting a business requires a lot of calculation and funding. So only do this if you know what you want to do, and you have a plan B as well.
Do some home improvements –this is a very common choice for many new and old homeowners. Renovating a kitchen or bath, or adding a garage are a few good ideas to start with. But each homeowner is different. Just be sure to check with your local building inspector first.
Start a Roth IRA –this is a great idea for those young professionals that haven’t really done much planning towards a retirement plan. Not every employer will offer a good retirement package or plan for their employees, so having a Roth IRA is a great idea.
So now for a couple things, you shouldn’t do with your tax dollars:
Have a huge party—now this might sound like a great idea for you young adults out there, but the fact is one day or evening of excitement will never equal the value of owning a new car long-term or having a strong retirement plan.
—items like a flat screen television or new golf clubs again are items that might make you happy initially, but in the end, they will not provide a great return. Your tax dollars are best suited to be used on something you will have great long-term functionality out of, such as a car or investment.
Another great option that many never really consider, is eliminating old debt. If you owe money on your credit card or student loans, it is always helpful for your credit score to help lower some of that debt you currently hold.
This is just a number of ideas that you should consider, but if you are on the market for a new vehicle, the best time to buy a used or new vehicle is now. If you have a good size refund coming your way that will go a long way to help put down towards a better car loan or lease.