If you got a tax refund this year, that’s both good and bad news. It’s good news because you got some extra cash that you can use to grow your stream or keep you up and running. It’s bad news because it means that you gave the IRS an interest free loan last year. Would you really give anyone who isn’t family or a really close friend the benefit of a no interest loan? I highly doubt I would. So how can you best use your tax refund to help you improve your business? Let’s take a look.
Invest in Your Business
You just got a couple of hundred and maybe even a couple thousand dollars. There’s something that you have had your eye on for improving your stream- perhaps hiring a contractor to help with design or YouTube videos, a new piece of tech, an upgrade to your computer/console, or even a new game. This windfall could help you buy it with less guilt. If there’s nothing that you’ve wanted to spend some money on to improve your business, you need to do some serious business planning.
You could also invest in your business by using these funds to help pay for a conference. I’ve written about the benefits of networking and some of the conferences that can help you with your business. The basic idea is that the more folks you know and are on good terms with, the more folks there are who might work with you or have an idea that improves your stream.
Invest in Yourself
You are your business. Without you, it’s nothing. Therefore, if you get a tax refund you might consider spending some of it on improving yourself. This could be educational things like business classes or a fitness course to help you stay healthy. If you’re like me, you’re acutely aware of some of the things you could be doing better. Take the chance to work on them!
For me, it’s been getting an MBA and joining networking groups. Yeah, it adds up over the course of the year. However each dollar I invest in myself pays back many times over as I build my business. Your story will be no different.
Pay Off Some Debt
Debt sucks. While it can be very helpful when you need to buy something you can’t otherwise afford (school, equipment, etc) interest drains you of resources. It also can prevent you from taking opportunities- if you’re stuck paying off debt then you don’t have cash free to invest in yourself, your business, or great ideas that others are implementing.
When tackling debt you want to pay off the highest interest loan first. It’s just simple math. A $1,000 loan with 5% interest costs you $50 annually but 10% interest costs you $100 annually. By paying off the higher interest loan you’re not only reducing your current debt but reducing your future payments. It’s a double savings!
Build An Emergency Fund
If you don’t have an emergency fund of 6ish months’ worth of essential expenses you need to start building it right now. An emergency fund isn’t what you use to pay your monthly bills. It’s a separate account, in cash or something like a CD, which you have in case things go south. Sometimes it could be an unexpected medical expense, a job loss, or a wrecked car.
An emergency fund helps prevent you from taking on debt! Yeah, you might not be earning much money on cash but you’re preventing yourself from having to pay 20% interest on a credit card when times are rough. If you’re considering going full time as a streamer or even reducing your work hours to do more streaming I’d highly recommend having your emergency fund in place first. That way, if things don’t go like you want them to right off the bat you don’t need to give up. You’ve given yourself enough runway to take off!
Save For a Non-Stream Goal
Is there something you’ve been wanting to do but it will take a while to save for it? Your tax refund can really help you out here. It doesn’t matter if the goal is something like more travel or something like going full time with streaming. Instead of spending your return on something you won’t value, take the time to think through what might bring you the most joy.
It’s really important to take care of your outside of streaming needs. Even if it takes most of your time and energy to grow the stream you should still consider some time away. I’ve often found that if I take some time off from something I’m working on I return with renewed interest and new ideas.
Conclusion
While getting a tax refund have good and bad parts to it you can do a lot of good with that cash. If you invest in yourself or your business, make your financial situation more stable, or work towards something that will put you in a better mood you’ve probably made your business stronger. If you have any questions, shoot me an email or leave a comment.
