Shelby Johnson has been working at a local pet store in the grooming department. She just...

Shelby Johnson has been working at a local pet store in the grooming department. She just received her W-2 statement from her employer so that she can prepare her taxes. Her tax withheld from her paycheck is normally greater than the tax owed as calculated on her tax return. in the past, she has used her tax return to build up her wardrobe with a shopping spree. However, as she gets closer to graduation she is reconsidering this behavior and needs help deciding on a better alternative. Given her current situation, list some suggestions on what shelby should do with a tax refund of $800.00. Her life situation she is 21 single no dependents and in college. Her monthly income $1750. living expenses $1210.00, personal property $7,300.00, savings $2000.00, student loans $3,000.00, and credit card debt is $2,400.00

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Answer #1

$800 is an average sum of money. Shelby should ideally invest the money in a place where it will grow at a decent rate and will not remain idle in her bank account like her other savings. She could always consider payment of her student loan since she would like to get rid of the burden of a loan as early as possible. It will also reduce her interest payments in the future. On the other hand, she could keep the money in a liquid fund where it will give average returns or buy equity in case she wants to opt for a high- risk investment opportunity. It is also a good chance to diversify her portfolio by buying government bonds and securities which are available at a discount.

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