5 Smart Ways to Use Your Tax Refund

It’s that time of year! Tax refund time… We know how tempting it is to spend that refund on the fun things in life: vacations, shopping sprees and dream home make-overs. And while there is a place for fun spending, we have some great tips to make sure you put your refund to good use!

Set-Up Your Emergency Savings

We have all been there… sudden car or home repairs, medical emergencies or even loss of job. Do you have an emergency savings set-up to help you through these situations? We recommend using your tax refund to set aside $1,000 (or as much as you can afford) as quickly as possible and then adding to that as you have the money available. If an emergency situation does arise and you don’t yet have all of the money you need, Blue Chip has a fantastic 2.99% APR credit card created just for these moments! The best part is you get to keep the 2.99% APR for the lifetime of any purchase in the first 12 months. So that emergency $4,000 car repair will ALWAYS be paid off at the 2.99% interest rate.

Teen boy holds ten dollars.

Pay down your debt:

Your tax refund is the PERFECT source to pay down or pay off your debt! If you are carrying high credit card balances, you will not only relieve stress and free up your income by paying down debt, you will also improve your credit score! 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.

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Save It for the Future:

We know… THIS is probably the least exciting of all of the options when it comes to your tax refund. But this is also one of the best choices you can make! The list of things to save for is long: retirement, kid’s college funds, home repairs and dream vacations… but you will be happy you chose this option when that time comes. Trust us and check out our increased CD rates to make sure you are getting the most for your money. We have Certificate of Deposit rates up to 2.25% APR for 60 months.

Woman inserts a coin into her savings piggy bank

Use your tax refund for an upcoming 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.

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Give to others:

How often do you wish you had extra money to help a loved one or neighbor? What about your favorite charity, church or someone in need? This is your opportunity! Once you have set aside money from your tax refund for savings and paid down debt, you now have some extra wealth to give to others. Not only will you make someone’s day, but helping others is proven to reduce stress, relieve negative feelings and help you live longer!

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