Did you recently receive your tax refund, but don’t know what to do with the extra money? While there are many options for spending your tax return, some may be better than others based on your circumstances. Sure, you might be tempted to use it on a shopping spree or extravagant vacation, but spending the money strategically will be more beneficial in the long run. Here are some useful ways to spend your tax refund that you might not have thought of.
Put it into your savings
No matter what your financial and personal goals are, having a savings account* is essential. If you’re already transferring a certain amount of money per paycheck to your savings, adding in your full tax refund can provide an extra boost to what you’ve already built. However, if you don’t already have a savings account, you can always use your tax return as a reason to start saving and investing in your future goals.
Start an emergency fund
Anything can happen and having an emergency fund can be a lifesaver when the unexpected occurs. Whether it’s an expensive vet bill, hospital stay, or a car repair – emergencies add up. The only way to truly be prepared is by saving money. And while you may already have savings, a separate emergency fund can prevent you from having to take from a different account meant for another expense.
Pay off your debt
Don’t let debt loom over you. Use your tax refund to pay down the money owed on your credit card or student loans. Paying off a large chunk of debt at once, can help lower your monthly credit card payment while also paying it down faster. While your full refund may not be enough to pay back everything, you can use it as an opportunity to start building a realistic repayment plan that works within your budget.
Make home improvements
Living in a home means there is usually maintenance, various fixes, and lots of upgrades to budget for. On the plus side, keeping up with these improvements can help lower energy bills and increase the value of your home over time. Replacing old windows, for example – can improve the efficiency of your air conditioning, thus reducing your electric bill during the hot summer months. Remodeling your kitchen or bathroom with new plumbing, appliances, or decor can help potentially also increase the value of your home and make it look more appealing when you’re ready to sell. While these projects can get pricey, using your tax refund – combined with a home improvement loan from us, can help make funding your project more realistic.**
Start your dream business
Maybe you’ve been dreaming of honing your artistic abilities by starting a photography business. Or perhaps you’re hoping to use your love of woodworking to begin crafting and selling furniture. Either way, your tax refund can provide a bit of capital to help get you started. While you don’t have to quit your current job to start profiting off your side business, it’s always recommended you speak with a financial expert (like us!) who can help advise you on which loan products and account offerings you’ll need to kick off your dreams.
Put it back into your community
Is there a cause or charity you’ve been wanting to support? Rather than donating money from your checking account without a plan, use what you’ve received from your tax return. Not only does your charitable donation benefit those in need, but it may also pose potential donation deductions for next year’s taxes. Not to mention it’s a financial decision you can feel good about!
*A $5 deposit in a base savings account is required for credit union membership before opening any other account/loan. All personal memberships are part of the Rewards First program and a $5 per month non-participation fee is charged to the base savings account for memberships not meeting the minimum requirements of the program. Click here to view full Rewards First program details. Some restrictions apply, contact the Credit Union for more information.
**Available on primary residence only. A First Financial membership is required to obtain a Home Improvement Loan and is open to anyone who lives, works, worships, volunteers, or attends school in Monmouth of Ocean Counties. See credit union for details. Rate will vary based off of applicant’s credit rating. Not all applicants who apply will be approved, subject to underwriting guidelines and credit approval. Lien position and appraisal valuation may affect the maximum loan amount. Not all applicants will qualify for maximum Loan to Value (LTV) ratio. It will be based off of creditworthiness, property type, occupancy, lien position, and loan amount. Rates will be affected by LTV or combined LTV if there is another lien on the property. Loan amounts over $7,500.00 will be required to give First Financial FCU a security interest in their property. Rates will vary based off of lien position and whether the loan is mortgage secured or unsecured. For mortgage secured Home Improvement loans First Financial FCU (FFFCU) will waive closing costs at inception of loan. If loan is terminated within the first 2 years of opening, closing cost waiver is revoked and are required to be paid back by member to FFFCU.