Six Savvy Ways to Use Your Tax Refund
If you’re expecting a tax refund this year, now is the best time to start planning how you’ll use that extra money. We believe the best uses are to pay down debt and bulk up your savings. Think of your refund as a kick start to a financially healthier YOU!
1. Start an emergency fund.
If you haven’t started one already, we recommend saving enough money to cover three to six months of expenses. So, calculate what your goal should be and start saving. Your tax refund can launch you quickly towards your target dollar amount! This type of fund can and should be used for those unexpected emergencies such as car repairs, replacing broken appliances, medical expenses not covered by insurance or if you lose your job.
2. Fund your IRA.
You can make up to a $6,000 contribution ($7,000 if you're 50 or older) to a Roth or a traditional individual retirement account (IRA) for the 2019 tax year. These contribution limits have increased by $500 since 2018 – that’s a pretty big change, so take advantage now…you’ll thank yourself next year when you’re filing your taxes and see the benefits!
3. Start saving for your child’s college education.
There are several options for parents to choose from to help fund their children’s college education! If you are a Florida Resident, check out your options available through Florida Prepaid. Open enrollment for 2019 runs February 1 – April 30, so don’t wait too long! Another popular option is a 529 plan. If you save for your child's college education in a 529 plan, you may get a tax deduction too! Visit SavingforCollege to find out more.
4. Close the skills gap to enhance your career.
Depending on what career field you are in, there may be specific training courses or certifications you can earn to help you advance in your field. Check out what other people on your career track have done to learn more skills or make themselves more valuable to their current or future employer.
5. Pay off debt.
Of course, using your refund to pay off high-interest-rate credit cards or loans can help reduce stress and give you the motivation to continue paying down your balances. Start with what makes you comfortable – whether that is paying off the highest interest rate debt first or paying off your lowest balances. Each have intrinsic benefits depending on your goals! Check out this blog we shared full of tips on getting rid of debt.
6. Start a Holiday Club account.
This type of account lets you save for holiday spending all year and even offers withdrawal restrictions so you aren’t tempted to touch it before the holidays. The CAMPUS Holiday Club Account even pays interest on your balance, with no minimum requirement! If your employer offers direct deposit, make saving even easier by having a set amount automatically deposited to this account.
By Campus USA at 4 Mar 2019, 16:48 PM