4 Smart Ways to Use your Tax Refund

Feb. 2, 2020

Tax time has arrived. Many employers are beginning to pass out W2’s and everywhere you look, you see ads for H&R Block and Turbo Tax. Before you run out to purchase new furniture or that big screen TV, consider these 4 smart ways to use your tax refund:

Pay off debt:

Give yourself the gift that keeps giving… a debt free life! Paying toward your debt will not only give you peace of mind and less stress, but it can also improve your credit! When determining your credit score, the credit bureaus look at your debt to income ratio. By paying down your debt, you free up your borrowing ability for the future. Check out our previous blog post to learn more about improving your credit score.

Father and son sitting at the table and working on banking from the computer

Set up an emergency savings account:

Do you have an emergency savings account? Most experts recommend having 6 months worth of living expenses saved in case you lose your job or income. If that feels overwhelming to you, start with 1 – 3 months and build from there! We also recommend putting that money away in a separate account that isn’t as easy to access. This could include opening a 2nd savings account or putting the money in a certificate of deposit. Certificates of Deposit typically earn a higher return than a traditional savings account and the money is “locked in” for a specific amount of time, making it harder to access.

Make your move:

Are you planning to move in the next year or two? It is well advised to have a few thousand dollars saved to help with any moving expenses that may come your way. This includes things you may need to upgrade or fix in order to sell your home. One of our employees had a big surprise after the home inspection was complete and they needed to pay to put in a hand rail on the outside stairs in order to sell their house. Having the cash on hand will help alleviate some of the stress that comes with moving! And if you have the extra cash available, you could even hire a moving company to take care of the heavy lifting.

Saving money, home loan, mortgage, a property investment for future concept : A man hand putting money coin over small residence house and money bag with nature background. A sustainable investment.

Save part of your refund and enter to win $100:

Take advantage of a special giveaways funded by two non-profit organizations. Save Your Refund is a special program developed to encourage Americans to save at least a small part of their refund! 100 participates will win $100. You can even enter to win their grand prize giveaway of $10,000. Check out saveyourrefund.com for complete details!