The calendar has switched over to a new year, which means - among other things - tax season is here. In 2018, more than 79 million taxpayers received refunds at an average amount of $2, 864. While it may be tempting to spend it all, there are many ways to put that kind of financial windfall to work for you. Tax refunds are exciting, but it's important to examine exactly how that influx of cash can improve your life beyond giving you the means to buy something fun.
Following are five ways to use your tax refund that can help you - or your loved ones - in the long-term.
1. Give your savings a boost. It's important to have an emergency cushion in your savings to help cover unexpected expenses as they arise throughout the year. Putting your tax refund in an emergency fund could give you some breathing room.
2. Eliminate credit card debt. If you are carrying large balances on credit cards, you may want to use your tax refund to help pay down that debt. Doing so will give you more monthly income that isn't going towards paying off debt.
3. Make an extra payment on other debt. If you don't have a large balance on your credit card, consider making an extra payment on some other debt - mortgage, car, student loan, etc. The sooner those bills are paid, the sooner you will be able to keep more of what you earn.
4. Add it to your retirement savings. You're not likely to regret having more money saved when you retire. Consider using your tax refund to give your retirement fund a boost.
5. Put it in a college education fund for your children. College is expensive and costs continue to rise. Putting money into a 529 plan or other college savings fund will make things easier when your children start pursuing their degrees.
Want to learn more?
Contact the Availa Bank branch nearest you to learn more about the options listed above.