6 Best Ways To Splurge With Your Tax Refund That Are Also Useful

There are plenty of fun purchases you can splurge on with your tax refund, and even more useful ways you can put a tax refund toward your financial health.

From investing in a startup to becoming a peer-to-peer lender, enjoy the financial benefits that come from putting your tax refund toward these good causes.

If you don’t already have a life insurance policy, consider putting your tax refund toward making this purchase.

Diana Angelini, licensed financial advisor and head of Ladder for Advisors, said spending your tax refund on a life insurance policy is an underrated, and useful, splurge. If the worst-case scenario happens, you’ll be covered under the policy that best suits your needs.

Nathan Mueller, financial planner and financial coach at BlackBird Finance, recommends using a tax refund to invest in a startup. 

There are a few things you’ll need to take note of before you invest. Mueller said you’ll want to diversify by investing in multiple companies. The minimums to invest are also low so most people can buy-in. Retail investors may invest in innovative startups and early stage companies with the use of platforms like StartEngine or WeFunder.

Do you ever feel there is a values mismatch in where your money is going, especially when it comes to the investments you own? Kerry Keihn, financial advisor and chief operating officer at Earth Equity Advisors, said investing responsibly is one of the ways you can bring your money more in alignment with your values. 

Use your tax refund to switch to green investments, whether you’re just getting ready to start investing or already have some investments built up. Keihn said the switch should be a smooth process: look for firms or funds that specifically state they have a fossil fuel free philosophy. This allows you to create a diversified investment portfolio and invest in more sustainable companies.

Another way you can bring your money in alignment with your values is by supporting a cause that matters to you. Keihn said you may use your tax refund to support an environmental-specific cause or donate to organizations that support women and girls, the latter of which has surprising environmental benefits.

“According to Project Drawdown, two of the top ten most powerful solutions to reversing climate change are educating women and girls, and access to family planning,” said Keihn. “These are two critical pieces of the puzzle to combat climate change, and they are important to keep in mind when you are evaluating different causes to support. While some might assume gender equity has purely a social impact, it also powerfully affects the environment and cannot be overlooked as a climate solution.”

“Consider using your refund to become a microlender or a peer-to-peer lender,” said Mueller. “You have a chance to lend money to people or businesses for a return and you can do so with a small amount of money.”

Where can prospective microlenders get their start? Mueller recommends using major platforms like Prosper and Funding Circle.

Sometimes the most useful tax refund splurges are the ones that improve ourselves. Danielle Miura, CFP and founder of Spark Financials, recommends using a tax refund for a self-care splurge. This treat can be anything from going on a vacation to taking a spa day or working with a personal trainer. It’s a splurge that rejuvenates you and helps you better perform in your everyday life.

“Investing in yourself may not give you the most obvious return on your money, but in the long run you may find that the positive vibe that you give others will be paid back to you,” said Miura.

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