Here are Three Financially Savvy Ways to Spend Your 2020 Tax Refund

As we all continue to navigate through the Covid-19 pandemic, there are a few financially savvy ways to spend your tax refund this year which can both help yourself out and help stimulate economic recovery. Continue reading below as we have generated a few ideas on how to spend your 2020 tax refund. After reading this blog, you may even consider combining several together to make a greater effect. 

Way #1: Contribute to Your Emergency Savings

Everyone was affected by the pandemic one way or another, however millions were affected by the economic challenges of Covid-19. And as the expenses of the year piled on, challenges like job loss, higher bills and hospitalization pushed the limits of individual savings. Aside from the multiple stimulus checks sent out to Americans throughout the pandemic, many Americans saw how quickly their savings could evaporate 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

Small and local businesses were among the hardest hit financially during the pandemic. A great way to use your tax refund is to support small and local businesses in your community and help these businesses rebound from the pandemic. Below we have highlighted a few ways to support local businesses, with or without the help of a tax refund. 

Gift Cards 

Purchasing a gift card is a great way to support small and local businesses as it 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.

Social Media

Today, social media is used by most businesses mainly for marketing reasons. Making a purchase at their location then talking about how much you love their brand or products on social media 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, another great way to help your small and local businesses is by writing a review online after making a purchase. Giving a five-star review can go a long way for a business, as not only is it important for attracting new customers, but businesses often receive an improvement in local search engine optimization as a result of positive reviews.¹

Order Out

The pandemic has also been hard on restaurants as quarantine and social distance requirements have forced many restaurants to limit their capacity, and thus how much money they can earn. However, by ordering out food for pick up or delivery, you can support the business from afar. In addition, you will also be supporting a local delivery business and delivery person, all while remaining quarantined yourself.

Way #3: Donate Resources to Local Healthcare Workers

During the early stages of the pandemic, healthcare workers on the frontline of COVID-19 saw a dramatic need for supplies such as masks, gloves, hand sanitizer, etc.. As many of these products are still needed over time, spending a portion of your tax refund to donate these supplies could be a great way support healthcare workers, and in some cases, local businesses at the same time. 

Personal Protective Equipment

Like mentioned above, using some of your tax refund to donate needed supplies to healthcare workers and hospitals is a great way to show your support. 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. 

Purchase Food

During the pandemic many healthcare workers have consistently worked long hours during this pandemic, with little time for a break. Taking a local healthcare worker out for lunch is another great way to say thank you while also supporting a local restaurant and delivery service with your purchase. 

Give a Gift

Since healthcare workers have been essential during the pandemic during, many have worked more hours than usual due to the high demand for their services. This has resulted in healthcare workers having little time left for themselves or with their families. Consider giving a gift card for something they can use to relax and spend time with their families.

Once you receive your 2020 tax refund, consider this list of financially savvy ways to spend 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.