It’s still early in the year, which means it’s tax season in the world of adulting. While many students in college are technically dependents under their parents, this year will be the first for many other students finally filing their taxes.
To get through the tedious process of filing, you may need to find a tax preparer (or crunch numbers yourself if you are a whiz at excel), collect all your documents like deductions and W-2s, and then do the actual act of inserting and sending your information to the IRS for the government and your state. Finally, you get your estimated refund amount, and you may be trying to figure out what to do with the extra money.
As young filers, many may be thinking about the impromptu trip they could book or the shopping spree that they could splurge on. While those things may be fun, there are some more responsible things that you can do that will benefit both you and your bank account in the long run.
- Invest in Stocks
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This year, much of our generation has been participating in the stock market through apps like Robinhood or Acorns, which make it easy to buy and share stocks for a profit. By using some of your tax refund to buy shares for the long term and selling them when the stock fluctuates in your favor, you could potentially double the amount of money that you received.
- Pay Student Loans
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Another good investment that can help your financial situation is being able to use the money to pay off any student loans or other debts. Using some of your money towards a debt payment will lessen the amount of interest collected through your time in school.
- Donate to a Charity
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Consider also donating a portion of your money to a charity or organization that benefits a cause you care about. As a fun fact, when you donate to charity, you can document that on your taxes for next year and they write that off as a deduction.
- Upgrade your Equipment
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Many people that use equipment for their job or business have the opportunity to invest their money into upgrades that could take their skills to the next level. For example, if you’re a photographer, it might benefit you to invest in some lenses for your DSLR. If you’re a podcaster, getting a second mic or an audio interface can greatly increase the quality of your activity.
Happy tax season, collegiettes!