💸 4 fun & responsible ways to use your tax refund

Saturday,
April 15, 2023

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The week in review

• Headline CPI for March came in at 5% compared to the 5.2% forecast and the previous month’s 6% reading. Core inflation saw a slight year-over-year increase to 5.6%. This was in line with expectations, but still represented an upward move from 5.5% in February. Nevertheless, month-over-month inflation in both indices saw a decline, indicating a modest easing of consumer prices.

• The International Monetary Fund cut its global GDP forecasts to 2.8% for this year and 3% in 2024. The IMF also said it expects growth five years from now to be around 3% — the lowest medium-term forecast in over 30 years.

• The US economy added 236,000 jobs, the least since December 2020 and slightly below forecasts of 239,000. Meanwhile, the unemployment rate declined to 3.5% compared to expectations that it would hold flat at the previous month’s 3.6%.

For more economic news, visit On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Here are 4 extremely fun ways to use your tax refund — that are still responsible.

If you’re one of those people who has already paid off debt, is actively investing, has a solid retirement plan, and is proud of your savings account balance… Well, go you. You’re killing it.

You might have earned the right to book a fancy trip to Ibiza, but if you’ve already achieved all this, our guess is you’re looking for ways to use your tax refund that are fun and rewarding, while still financially responsible. Here are a few ideas:

1. Gift a Loved One: The IRS sets a limit on the gifts you’re able to transfer to family members and others without having to pay a gift tax. As of 2022, the limit is $16,000. This means you can send up to that much without triggering taxes for the person you’re gifting.

2. Fund Your Business Idea: Have you always wanted to start a small business? Now might be the time. You may be able to avoid taking out high-interest loans to start your venture by leveraging your tax refund!

3. Take a Class: Education can improve your life in so many ways. Take a class in a subject that interests you, or to learn a new hobby. If you look for courses at your local community college or adult ed program, you may be able to save significantly on tuition. Oh, and we’d be remiss not to mention SoFi’s Coursera offerings on Financial Literacy.

4. Try a Meal Subscription Service: Do you eat out all the time? It might make sense to put your tax refund towards a meal service that sends you ingredients and simple recipes each week. It’s not as affordable as cooking using grocery store ingredients, but it’s a fun upgrade from the norm!

5. Donate It: If there’s an organization you believe in and want to support, you might consider donating your tax refund to that group. It’ll have an incredible impact AND you may be able to deduct your donation on your taxes next year for a win-win.

If you’re still wrapping your head around the topic of taxes more generally, check out this guide to understanding your taxes.

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