If you’ve filed your taxes and have discovered you’re getting a refund, you’re probably already dreaming about what to do with the money. It might be tempting to splurge on a vacation or nice clothes, but it’s always a smart idea not to spend it all; think about how to use this money to financially benefit you in the long-run. Here are a few ideas to make the most of your tax refund.
Pay down debt: You’ll be doing yourself a favor by putting money towards credit card debt or a loan. You’ll not only lower the balance owed, but you’ll decrease the amount of interest you’ll be charged every month.
Invest in the future: This could mean putting your tax refund towards a retirement account or if you have children or grandchildren, a tax-deductible 529 College Savings Plan to help pay for college when the time comes. These can each make a positive impact on your financial health and help to secure your family’s future.
Donate to your favorite cause: If you’re not pressed for the extra money, consider making a tax-deductible donation to a nonprofit or charity. You’ll feel good about making a meaningful contribution to your community.
Upgrade your home: Depending on how much you’re getting back you can make some improvements to your home. Installing a new appliance, like a refrigerator that is more energy efficient than what you have, can improve the look of your kitchen and save you money. And you may qualify for local, state or federal tax breaks so do your homework and save the receipt! Getting some needed repairs done or a small remodel can even increase the value of your home.
Save for a rainy day: One of the biggest lessons to come out of the pandemic is to prepare for the unexpected! It’s always a good idea to have a healthy savings account – at least six months of living expenses – for situations you don’t anticipate.
If you’re looking to set up a new savings account with your tax refund, please visit your nearest Waypoint Bank location. If you’re in Nebraska and are interested in different investment options, please consider using Waypoint Financial’s professional services.
Since 1883, Waypoint Bank has been providing superior financial solutions that promote the small-town approach of putting relationships first. For 140 years, we’ve been earning your trust in the most friendly and professional manner possible while guiding your success.