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Monday Messages

Smart Ways to Use Your Tax Refund for a Brighter Financial Future

With tax season in full swing, you might be anticipating a considerable tax refund, and wondering how best to use it. The IRS typically issues refunds in less than 21 days, so you'll have some time to decide. The optimal way to spend your refund will depend on your financial situation and future goals.

Here are some suggestions for making wise use of your tax refund.

Build an Emergency Fun

If you don't already have one, starting an emergency savings account could be beneficial. Financial emergencies can happen to anyone at any time, whether it's a car accident, job loss, or unexpected medical bills. Having three to six months of savings will help you be better prepared for unexpected costs. Consider opening a Money Market Account to see your investment grow, with just $2,500 needed to begin earning interest, and unlimited withdrawals.

Boost Your Retirement Fund

Contributing your tax refund to a retirement fund, whether it's an employer-provided 401(k) plan, an individual retirement account (IRA), or both, can help boost your overall savings. If you need to start a retirement account, check out our Traditional and Roth IRA options.

Make a Payment on Your Debt
If you have multiple debts, consider applying your refund to those with the highest interest first. Paying down credit card debt ahead of other loans as a way to spend your tax refund could also improve your credit score.

Make Home Improvements

Spending some of that refund around the house can go a long way. Replacing old windows can improve the efficiency of your air conditioning and reduce your electric bill. Old appliances can be replaced by models that use less energy. Small remodeling projects can improve the functionality of your house now and make it more attractive when you decide to sell.

Invest in Your Family

Spending quality time with loved ones doing something fun is sometimes the best thing we can provide our families. Research shows that experiential purchases contribute more to our overall happiness than material purchases. There are a ton of fun experiences to choose from, such as visiting a zoo or a museum, attending a play or a concert, or even using that tax money to start a vacation fund.

Invest in Yourself

Spending money on yourself can improve your overall well-being. Using your refund to pay for a year's gym membership or enrolling in workout classes are good ways to improve your health. If you struggle with back issues or poor sleep, investing in a new mattress could be a wise decision. By committing energy and financial resources to your own personal development, you can learn new skills, pursue new interests, or even build your career.

While it can be tempting to go on a shopping spree, spending your refund wisely can provide real benefits. Consider your options for saving, paying down debt, and investing in things or experiences that will bring you long-term benefits. Make a plan and commit to it, so that when your refund arrives, you'll know exactly how to put it to work.

We're with you!