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A Healthy Way to Spend Your Tax Refund

01/14/2020

It’s officially tax season! Before we know it, those hearty refunds will be rolling in. So, your question is: What do I do with it?

It’s tempting to use it to treat yourself, right? A trip, a down payment on a new RV, an updated closet. But while using a small percentage for something fun is understandable, you may want to save the majority for something that helps you. What we’re saying is: taking care of important finances now will eventually lead to the ability to spend more on what you want in the future – more often.

Here are our suggestions:

Pay off your debt! If you have a high-interest loan or credit card, get rid of it. Even if your refund doesn’t take care of it completely, you can still make a nice dent.

Deposit into a high-yield account. It can be hard to set aside money from your paycheck, so your refund is great way to start a new account. You’ll also be able to earn interest off this money, especially if you choose a high-yield account. Or...

Open a CD. A certificate of deposit is like a short-term or long-term savings account. Your money is held for a certain time period, usually 6 months to a few years, accruing interest during this time period.

Start an emergency fund. What would you do if you lost your job today? Do you have funds to carry you through a couple months? Set up a special account for your “emergency fund.” This fund should be set up to cover your basic expenses for a few months.

Open an IRA. An Individual Retirement Account is another way to save money for your hard earned retirement. 

Use it as a down payment. If you’re in the market for a new home or car, you can use your refund to put more cash up-front. Doing so will reduce the amount of financing you’ll need. You’ll thank yourself in a few years.

Fix up your home. If you’ve been putting off important home repairs or energy-saving improvements, now’s the time you can get it done. Need more funds?

Get a checkup on your car’s maintenance. A well-maintained car can last you a long time. Check with a trusted mechanic about what you can do to help your vehicle last longer and be more efficient. 

Expand your education. A college class may help you get ahead in your career. Check with a local college about what they offer for healthcare professionals. 

Alyson Moss - Marketing and Business Development Manager