It’s officially tax refund season! You’ve probably already filed (or this is a friendly reminder to do it soon!) and are now waiting patiently for your refund. While you may be dreaming of splurging on a new car or dream vacation, take this time to really think hard about where the extra money can be spent to maximize your long-term happiness and financial security. Check out these ideas to make the most of your tax refund this year.
Pay Down Debt
Getting your tax refund in the mail may prompt you to do many things: spend it on the kids, buy your spouse a gift, loan it to a friend, etc. Before making a decision, consider using it to pay down a debt you have – before you can take care of anyone else, you’ve got to take your financial well-being into consideration. Consider paying off any of the following debts:
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Establish an Emergency Fund
Life’s unexpected moments are the last thing you’re thinking of when you receive your tax refund. In fact, that’s probably the last thing you’re thinking about at any given time. It’s for just that reason you should store up funds to ensure that you can handle any curve balls down the road. Using your refund to establish or build up an emergency fund is not only smart, but extremely important in maintaining a sense of calm when life catches you off guard.
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Save For a Day to Treat Yourself Later
Even if you happen to be in the fortunate position where you have no pressing debts and you already have money put away for emergencies, you should still consider saving your refund. Saving that money allows you to wait until you see something you really want or need. Once you find that worthwhile purchase, you’ll have that Treat Yourself Fund waiting for you without needing to dip into any other savings accounts or loans.
What Not to Do With Your Tax Refund
While any of the above are smart options, the following are not so smart. We suggest not using your tax refund for any of the following ideas:
- Buying a bunch of little things – Using it to get a lot of little things may seem like a good idea, but that money disappears quicker than you would think.
- Taking a chance – Be sure to steer clear of lottery or gambling activity. Striking gold is a nice idea, but it doesn’t always work out in your favor.
- Spending it all in one place – You’re better off investing in your future rather than investing all of your money on one, big purchase.
Open Up A Savings Account With MNFCU!
Another option you should consider after receiving your tax refund is opening a savings account with Metro North Federal Credit Union. MNFCU offers competitive dividends and you gain peace of mind knowing your savings are safe and federally insured up to $250,000 by the NCUA.