Wise Uses for Your Tax Refund

By Mary Lukow, Assistant Manager, Chebanse Facility

It’s that time of year again.  With only days left to file tax returns, many of us know whether we will be writing a check to the government or whether we will get money back.  For those of us who are receiving a refund, we will need to decide what to do with the extra cash.  It’s easy to spend money, but perhaps you’d like to do more than just spend it.  If you want to use your tax refund to better your overall financial situation, then try one of these suggestions.

Attack Your Debt

Debt is easy to fall into and hard to climb out of.  It continues to be a major problem nationwide.  If it is a problem in your home, your tax refund could provide you a place to start with paying back what you owe.  Reducing debt, especially credit card or other unsecured debt, puts you in a stronger financial position and gives you flexibility to handle unexpected expenses or changes in situation.  Paying down your debt might also reduce your total monthly debt payments, giving you more discretionary income each month.

Boost Your Emergency Savings

Like eliminating debt, building an adequate emergency savings fund is an extremely important financial goal.  In the real world, unexpected events are bound to occur, and often these unplanned events carry a hefty price tag.  Since you can’t schedule emergencies, you need to make sure that you are prepared for them, whenever they may occur.  Putting away your tax refund in a savings account that can be accessed at any time gives you peace of mind, knowing that you will be ready for an unexpected expense.

Work Toward Retirement

No matter how much you love your job, you probably don’t want to be doing it when you’re 80.  You probably want to retire early enough to enjoy some freedom from the daily grind.  The reality is that if you’re not setting aside money for retirement, it will be very difficult for you to retire.  In addition to regularly investing money for your retirement, you can also use money from your tax refund (or other windfalls) to supplement your retirement accounts.  Every little bit adds up!

Take Care of Needed Repairs or Purchases

Saving money is always a smart idea, but it’s not always possible.  Sometimes spending money is a necessity.  Your tax refund may be a great way to cover repairs or necessary purchases without going further into debt.  Whether you need to have some work done on your car or put a new roof on your house, you can use your tax refund to make smart investments into your personal property.

Get Smart with Education Spending

In addition to investing in your property, you could also use your tax refund to invest in yourself.  You can make yourself more valuable at your job or more marketable for a new job by taking relevant classes.  The availability of online classes has made it easier than ever to expand your skills and knowledge.  Figure out what you need to move to the next level in your career and then take advantage of your refund to take that step.

Sure, when you get your refund check in the mail, you could take a fun vacation or enjoy a shopping spree. However, the benefit from these is only temporary.  Making a wise choice for your tax refund can provide ongoing satisfaction and greater financial stability.  If we can answer any questions for you or help you work toward a more financially secure position, do not hesitate to call or stop by one of our branches.