4 Ways To Give Back With Your Tax Refund

By Riya V. Anandwala | March 25, 2011 AAA
4 Ways To Give Back With Your Tax Refund

Many of you find yourselves financially stable, even in the recession. You have enjoyed your tax refund in different ways - buying a car, taking a family trip and even saving up enough for your kid's college education fund. This year, when you reach the crossroad of how to invest your money, ponder over spending it selflessly ... and wisely. (For related reading, also take a look at 9 Ways To Use A Tax Refund.)
TUTORIAL: Budgeting Basics

Selfless-activities don't necessarily boil down to charity. It also means investing money in different avenues by which one gives back to the community and gets educated in the process. These include helping your elders or someone unknown in distressed situation, or even understanding the nuances of non-profit by spending in the right direction.

1. Parent Fund
Every parent saves a part of their hard-earned fortune for their children's education or weddings. An education fund or savings bond are familiar vehicles for this type of savings. But how often do children save up for their parents when they grow old?

While in some cultures this is a known practice, in others it's just viewed as a noble practice. A parent-fund will allow you to slowly collect money for the larger goal of helping your parents through difficult times of illness. This fund can also be used in buying a valuable gift for your parents such as a vacation or a high-tech gadget. The tax-refund money can fully or partially satisfy this goal.

2. Charity Jar
You may have the money to contribute toward a charity, but not the timing is not always right. Saving for unforeseen charity opportunities will remove the stress of taking a chunk from your existing savings. Buying cookies from Girls Scouts or pitching in for a benefit party are great ways to help a cause, while receiving a little something in return.

This collection doesn't have to be an overwhelming amount. When the tax refund comes, slowly start depositing $50 a month in this goodwill account. As the money starts to populate across months, you will have plenty nearing the year-end. More often than not, you will end up donating money to a cause personally related to you, and that is truly satisfying.

3. Go Fair-Trade Shopping
Eating and shopping at a non-profit eatery or store is not only a good deed, but it is highly educational as well. Breeze through a fair-trade store and you will see that laborers in underdeveloped and developing countries such as Equdaor, Chile, India, Vietnam and Mexico produce items that are sold there. These stores promise to provide these workers full wages and a healthy working environment.

These stores also offer educational facts that can be value for your money. Similarly, eating at a locally owned non-profit café will benefit the community or the particular cause the money goes to. This could be one of those family traditions your kids can be proud of.

TUTORIAL: Personal Income Tax Guide

4. Sponsor a Child
There are many disaster-struck areas where children go without food, clothing and even education. Providing for a child's well-being is a reasonable expense for a financially-stable individual. The range is between $35 to $40 a month, depending on the country and the goal. With tax refunds averaging around $3,000 this year, $400 to $500 is a practical amount to spend on a good cause such as this.

There are several non-profit groups that can walk you through this process and they are accessible on the web.

The Bottom Line
While tax refunds are mostly seen as the most probable saving or investing proposition, many people believe going beyond the routine. Set aside a part of your tax refund for some good deeds and spend or invest the rest. It's a great way to balance your year. (For additional reading, also check out Want A Bigger tax Refund? Don't Itemize.)

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