As we continue navigating the pandemic, there are a few financially savvy ways to spend your tax refund - both to help yourself out and stimulate economic recovery. Read on to discover a few ideas, you may even consider combining several together to make a greater effect.
Way #1: Contribute to Your Emergency Savings
The economic challenges of COVID-19 affected millions around the world. And as the expenses of the year piled on, challenges like job loss, higher bills and hospitalization pushed the limits of individual savings. Despite the distribution of stimulus funds, many Americans including those in the Greater Milwaukee area saw how quickly their savings could be drained during an emergency.
For this reason, it may be beneficial to place your 2020 tax refund into an emergency savings account. Not only to replenish the funds that may have been used throughout the year, but to make sure you have a safety net for future unexpected expenses.
Way #2: Support Local Businesses
Local and small businesses have experienced some of the hardest-hitting financial damages from COVID-19. Using your tax refund to support them could be a great way to help your community. Below are a few ways to support local businesses, with or without the help of a tax refund.
Purchasing a gift card allows you to spend a large amount without having to actually buy something. You can distribute these cards to friends and family, or use them over time to purchase your own products.
Many businesses are active on social media for marketing reasons. Making a purchase at their location then talking about how much you love their brand can be a great way to attract attention. This allows you to support their business while spreading the word to others.
Write a Review
Like interacting through social media, making a purchase then writing a review online can be a great way to help a business in the long-term. Not only will a five-star review be important for attracting new customers, but businesses often receive an improvement in local search engine optimization as a result of positive reviews.1
Quarantine and social distance requirements have forced some restaurants to limit their capacity, and thus how much money they can earn. But, by ordering out food for pick up or delivery, you can support the business from afar. Plus, you will be supporting a delivery business and delivery person, all while remaining quarantined yourself.
Way #3: Donate Resources to Local Healthcare Workers
Healthcare workers on the frontline of COVID-19 saw a dramatic need for supplies at the beginning of 2020. And, as many of these products are still needed over time, donating them can be a great way to support healthcare workers, and in some cases, local businesses at the same time.
Personal Protective Equipment
Supplies like hand sanitizer and gloves can all be donated to benefit healthcare workers and facilities. Even if you can’t get a hold of these supplies yourself, you could donate to an organization that can.
Healthcare workers have consistently worked long hours during this pandemic, with little time for a break. Purchasing lunch could be a great way to say thank you while also supporting a local restaurant and delivery service with your purchase.
Give a Gift
With such a demand in the field, healthcare workers have little time left for themselves or their families. Consider giving a gift card for something they can use to relax and spend time with their families.
Consider this list when you receive your tax refund. And whether you choose to place your refund in emergency savings, spend it to support local businesses or a combination of any of the above, it's important to help support the economic recovery as we move into the new year. Contact our office for more information on how we can help you reach your goals. David DeMore, CFP®, MSFS, EA is a tax and wealth advisor serving clients in Brookfield, Lake Country, Mequon, and Milwaukee.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.