Every year, I wait with great anticipation to see whether we will get a tax refund. As a writer and small business owner, I must pay taxes on my earnings. I gather all my receipts, pay my taxes quarterly, and do my best to overpay to ensure I receive a refund each year.
If I've taken out enough taxes, I get a refund that’s sometimes in the hundreds, other times in the thousands. Getting a refund check is like getting an extra Christmas present!
Once the money is deposited into my account, I have one question that ruminates in my mind:
What am I going to do with the money?
As with anything, I need to be a good steward of all that God has given me. This includes my tax refund. Because tax laws change every year, I don't know how much money I will receive back. I can provide a ballpark estimate of my earnings and the appropriate refund, but it may not always match. Adjustments and changes each year change the amount that I receive.
If I do get a refund, I will be a good steward of that money just like I would with any other paycheck he has given me. What does it look like to be a good steward of your tax return? Here are five ways you can be a good steward and know you've done a good thing with the money:
Pay Down Your Mortgage (or Other Bills)
In other months of the year, we have enough to cover our monthly mortgage payment, but we rarely have enough money saved to pay down extra principal. Paying extra principal can significantly reduce the amount of interest I pay over the life of the loan. Additionally, it reduces the amount we owe on the house. This means I can pay off my house sooner and own a piece of property to live in, or I can sell it and make a profit.
If you receive a tax return this year, consider paying down bigger bills. Do you have big loans or something that is putting a strain on your regular monthly budget? Consider paying down a portion of those bills (or even paying off those bills). The feeling you will receive from having a little extra wiggle room in your budget will supersede spending it on any frivolous possession or fancy vacation.
Invest It
Another way to be a good steward is to invest it. The Parable of the Ten Minas (Luke 19: 15-20) gives us wisdom when it tells us what to do with money that is given to us:
“Then he sent for the servants to whom he had given the money, to find out what they had gained with it. “The first one came and said, ‘Sir, your mina has earned ten more.’ ”Well done, my good servant!’ his master replied. ‘Because you have been trustworthy in a very small matter, take charge of ten cities.’ “The second came and said, ‘Sir, your mina has earned five more.’ “His master answered, ‘You take charge of five cities.’ “Then another servant came and said, ‘Sir, here is your mina; I have kept it laid away in a piece of cloth…”
It is clear from this parable that the person who invested it and received the extra return was the one praised and given more. However, the person who just put it in the bank and did nothing with it, with no interest, did not receive an extra reward.
Although this parable is a lesson in how we should live for Christ and proclaim the gospel, it's also good advice for receiving extra money. If you receive extra money at the end of your year, what will you do with it?
Do some research to find low-risk investment opportunities that suit you. Try mutual funds or investing in stocks that you know won't be too volatile. Don't invest it in something that seems like a get-rich-quick scheme, like Bitcoin, or in anything that would let you lose the money quickly. You will deeply regret it if you find you don't have any money at the end of the quarter simply because you invested it in the wrong area.
I suggest asking someone who knows about finances for help. Consult a financial advisor or a leader in your church who does well with money and knows how to invest.
Give to Those in Need
Giving to those in need is always a great way to be a good steward of what God has given you. The Bible is filled with Scriptures that emphasize giving to those in need. It always honors those who choose to sacrifice and give to those who have nothing. If you have an extra windfall from the year, consider giving a portion of it—or all of it—to someone you know who is struggling.
There may be a single mom who needs food and housing for their children. This can be someone at your local church or an organization that helps those in need in your community. Be a witness for Christ by giving even a little of your extra tax refund to those in need. Not only will you make an impact in the world, but you will also be a good steward of God's money.
Tithe It
Most Christians understand that they are to give ten percent of their income to their local church. This is to help keep building up, pay salaries, and allow the church to continue its impact in the community. However, have you ever considered tithing an extra portion of that money? In other words, tithe 20 percent rather than just 10 percent one month. You can earmark it for a particular ministry or something that the church is doing that you know will directly be affected by this extra income.
You can choose to donate it to a local pregnancy center, food pantry, or other global ministry. Many denominations focus on missions both locally and globally. Some have direct access to global ministry centers that send people out to proclaim the gospel to unreached people's groups. You can give that money to that fund, allowing a missionary the freedom to proclaim the gospel without fear of where their next meal will come from.
What a joy it will be when you get to heaven, and you meet the person whose life you impacted with that extra money. The realization that you directly impacted the world with your money will be better than anything you could do here on earth with that money.
Honor Your Parents
The Ten Commandments, in Exodus 20, list honoring your parents as one of the strict commands God gave to his people. It is important to honor your parents, even if you have a strained or non-existent relationship with them. Is there someone in your family who is struggling to make ends meet? Do you have only one living parent, and the other has passed away?
If that living parent is struggling, it might be good to give them some money to help pay down their debt or cover living expenses for the next few years. Invest that money by using it directly to meet one of their needs, pay down their mortgage, or pay off other bills, especially if they have a low income.
If a parent is on Medicare or Social Security, they could use all the help they can get. With those totals dwindling, it is no wonder that older adults struggle to live on today's government benefits. Help fill the gap by giving them extra they can use to live on if they need it. It's a great way to honor their legacy and what they did for you while you were growing up.
Receiving a tax return is an exciting opportunity for you to make an impact in your community or your world, pay down your debt, and relieve the financial burden of those that you know or strangers in your area. Regardless of what you choose to do with the money, resist the urge to spend it on a frivolous vacation or big purchase. Make an impact in your world by giving to one of the areas listed above and be the hands and feet of Christ to those in need.
