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How to Spend Your Tax Refund as a College Student | Undergrad Success
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How to Spend Your Tax Refund; Invest in Yourself

How to Spend Your Tax Refund; Invest in Yourself
Jessica Bahr

It’s that time of year again. Tax returns are filling our bank accounts. Across the United States, the average tax refund for the 2012 fiscal year is $2,985, a 4% decrease from 2011. As a college student every dime matters; however, if you’re still not sure where you refund is going, take a look below. This is the perfect opportunity to invest in yourself whether it’s personally, professionally, or financially.

Personally

Get a passport
According to the U.S. Department of State only 39% of the US population has a passport. A passport book costs $135 and can open the door to many opportunities. Maybe this means you can take a trip to Cancun over summer break, or maybe it’s a means by which you can travel abroad through academic exchange programs, or even a vacation. No matter the case, this is your ticket abroad. Take advantage of the opportunities available to you.

Invest in fitness
According to the Center for Disease Control and Prevention, 69.2% of adults age 20 and older are categorized as obese or overweight. I’ve been where you are, so I know how hard it can be to make a change in your life. Your health is of the utmost importance, though. You get one body, and this is the only chance you have to take care of it. Use some of your tax refund to join the local gym, to purchase sessions at a yoga or kickboxing studio, or to buy a new pair of running shoes … maybe even Vibram Five Fingers.

Professionally

Join a professional organization
Regardless of whether there is a student chapter on campus, most professional organizations have reduced membership rates for students. These can serve as a great resource for enhancing your industry knowledge, applying your classroom concepts, and finding future employment through their conferences … which students may also attend at reduced rates.

Take a certification course
Differentiate yourself from your peers by earning a certificate before you graduate. Options vary by industry, so if you’re unsure of what to pursue, check out LinkedIn and see what other professionals in your desired field are earning. Remember those professional organizations I told you about? Some even offer continued education and certification programs for their members. Do yourself a favor and put in the extra time.

Financially

Invest in your future
You can get a loan for school. You can get a loan for a car. You can get a loan for a house. You can’t, however, get a loan for retirement. Many options are available to undergrads with a popular and widely recommended option being a Roth IRA. Also available are: opening a CD, purchasing government bonds, or opening a brokerage account.

Beginning an Individual Retirement Arrangement (IRA) now is one of the best decisions you can make. The most widely recommended IRA is a Roth IRA which offers a different tax structure. Please see this summary from Fidelity for more information on the Roth IRA and contribution requirements.

Pay off your student loan interest
The best investment you can make, though is to pay off the interest your student loans may have accrued. As it happens, the money paid toward student loans can be deduced as an adjustment to your gross income. At the time of publication the cap is $2,500. This means that you’re using your tax refund this year to save more money in the next. Check out other additional tax breaks for students from Business Insider.

Whether you decide to invest or reward yourself with something special … a Lego X-Wing Starfighter for me … allow the extra money to be a catalyst for something positive in you life.

Let me know what you’re going to do, tweet at me or comment below

Sources:
http://www.businessinsider.com
http://www.cdc.gov/
http://www.theexpeditioner.com
http://www.fidelity.com

http://www.irs.gov
http://travel.state.gov/

 


Personal
Jessica Bahr
@Jessabahr

Jessica is a social media enthusiast working in the user experience and customer experience optimization industry. You can find her on Twitter (@Jessabahr) or talking about technology news and mobile-first app design on the Internet Pandas podcast. She has a background in process engineering and graduated with a degree in Integrated Supply Chain Management from the University of Wisconsin - Platteville, School of Business.

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