Don't blow your refund! We'll give you ideas of how you can put it to good use.
How many people do you know that receive a HUGE tax refund every year? I’m sure we all have the same answer - tons of people! Now let me ask you this… How many of your friends and family actually put that HUGE refund to good use?
I have been on a huge savings kick myself this year. We’ve all heard the tips on how to save money on a daily basis. Save your change, budget high, open a savings account…. But what would you do when a big chunk of change suddenly direct deposits into your checking? Do you know what to do to put it to good use?
Here are a few tips and tricks that I came up with to help you save your tax refund and not let it go to waste!
Pay off debt
One of the best things you can do to cut down on debt is to pay it off! Stop making those minimum payments on your credit cards monthly and pay them off. Start with the one with the smallest balance first and then work your way up. You will save so much money over the year in interest, and you will cut down on your monthly bill budget.
I once read an article that said you should always have six months of living expenses in your savings account in case of an emergency. That way you will always be prepared for the worst. You never know when you or a family member could become ill, injured, or even laid off. Six months can be a lot of money for the average person, but putting your tax refund into an emergency fund is a great start!
Every parent says it - “Our kids grow up so fast!” Well, they really do! And you can start saving while they are little instead of waiting to get that first hefty tuition payment when they’re off at college. Invest your yearly tax refunds into a 529 plan. They are tax deductible and an easy way to start saving for college expenses while your kids are young. Visit www.irs.gov for specifics.
Pay ahead on your home
I think most of us would say our biggest monthly expense is our mortgage. Making additional principal-only payments to your mortgage will not only trim down on the amount you owe but will also reduce the number of years the interest that you have to pay. Instead of blowing that tax return on new furniture, apply it to your biggest investment - your home!
The best way to start an emergency fund is to set up a separate savings account. First Bank gives you options.