If you’re one of the millions of Americans receiving a tax refund this year, why not use that money to reap long-term benefits? The following seven options could make a lasting impact on your financial well-being:
- Boost or replenish your emergency fund. Having an emergency fund to cover basic living expenses is an important step to achieving your financial plans and keeping your retirement funds secure. If you don’t have six months of living expenses set aside in a high-interest savings account, use your tax refund to get closer to that goal.
- Pay down high-interest debt. If you have credit card debt, pay down your balance to get out of debt quicker. Then invest the money you save each month.
- Fund your retirement. If your emergency fund is set and you don’t have high-interest debt, invest your tax refund in your retirement plan. If you want to reap the full benefits of compound interest, the sooner the better.
- Invest in your career. If there’s a course you’ve been wanting to take to boost your career, use your refund for tuition. Or, perhaps you have a hobby you’ve always wanted to turn into a side business. Why not use the money to create a website or build the inventory you need to get started?
- Update your home. Increase your home’s efficiency with new windows or appliances. You’ll save money on utility bills now and make your home more valuable when it’s time to sell.
- Buy life insurance. Purchase a term life insurance policy to guarantee your loved ones an equal standard of living should tragedy strike.
- Support a charity. Donate part or all of your tax refund to a charity and lower your taxable income in the process.
How you spend your money will ultimately depend upon your goals and individual financial situation. If you need help deciding your best route, call our office.