Tax season is an opportunity to strengthen your financial future. Instead of spending your tax refund immediately, consider ways to make it work for you.
Unexpected expenses happen. Set aside part of your refund in a high-yield savings account or an emergency fund to cover car repairs, medical bills, or job loss. Experts recommend having at least three to six months’ worth of expenses saved.
Using your tax return to pay down high-interest debt (such as credit cards or personal loans) can save you money on interest and improve your financial stability.
Consider putting your refund toward long-term financial goals:
Retirement Savings – Contribute to an IRA or increase your 401(k) contributions.
Education – Start or add to a college savings plan (such as a 529 plan) for yourself or a loved one.
Use your refund to jump start or enhance your savings for:
A down payment on a home
A major purchase (car, home improvements, etc.)
A vacation or special event
Many tax preparers and the IRS allow you to split your refund into multiple accounts. This can help automate saving while still keeping some for immediate needs.
Before your tax refund arrives, make a plan for how you’ll use it. Prioritizing savings and financial growth can turn your refund into a stepping stone toward long-term financial success!
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