For many people, good financial news usually comes around April 15, when they will discover that they have a tax refund on the way.  It might be the start of even more good news, as there are some signs that the economy is also turning around.

If you get a refund check from the IRS, great. And if it’s the start of better economic developments for you and your family, even better.

But with positive developments, comes the need to make good decisions. If your financial situation improves – whether on a one-time basis or more permanently – what are you going to do, not only with the money, but with the way you operate financially?

One thing to consider is that your tax refund is not a gift from the federal government. The money belongs to you – it always did – and the government essentially borrowed it from you for the better part of the year without paying you interest. You might want to consider adjusting your withholding so less will be taken out of your check. We understand that people love their tax refund checks, but you could have been earning interest on that money all year long. Assuming you saved it and didn’t spend it, you would end up with more money that way than waiting for a refund check.

But that save-not-spend part of the equation is important. When you start earning a little more money, it’s a good time to reassess how you budget, how you save and how you plan.

On the one hand, you want to pay off any high-interest debt as quickly as you can. On the other hand, you want to put something away for your future – especially retirement. And it’s a good idea to have some money in a rainy-day fund – with easy access to the cash – in case of something unforeseen.

The best idea is to develop a plan that incorporates all of these priorities. Develop a budget that takes into account all of your regular expenses, then allocates portions of what’s leftover for debt payments, savings and a rainy-day fund.

Having developed that plan, treat your tax refund like a paycheck and use the money accordingly. Then treat all your subsequent paychecks in the same way.

There’s plenty you can do. In addition to paying off debt and saving, if there is something you’ve been needing (not wanting) to buy, it’s wise to pay cash for it if you can, so you don’t add credit card debt. Beyond that, priorities might include:

• Home improvements
• Investing in a tax-sheltered account, like a 529 or Roth IRA, depending on your income and goals
• Investing in a taxable account like a Brokerage Account
• Giving to charity
• And if you still have money left over, buying something you just simply want isn’t such a bad thing to do

Our experts located at First Financial, can walk you through the process. It’s worth remembering: The economy tends to go in cycles, and when you save and eliminate debt today, you put yourself in a stronger position for when times are tougher. Make a plan, stick to the plan, and watch as your situation continues to improve. Maybe that tax refund check will be the start of something pretty special. Give us a call at 732.312.1500 to set up a no-cost consultation or visit our website for more information!

Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free 800-369-2862. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. FR031214-CF9C