- April 2024
- Premier America
Tax season has rolled around once more, and with it comes the opportunity to make smart financial choices with your tax refund. This year, as you consider how to allocate your tax refund, we encourage you to think about ways it can work for you in the long term. Here are five suggestions to help you make the most of your refund:
Address Your Debt
Firstly, consider using your tax refund to pay down any high-interest credit card debt. This might not be as thrilling as planning a getaway, but it's a strategic move towards financial health. By targeting the debt with the highest interest rate, you're not just reducing the amount you owe; you're also freeing up future finances and potentially improving your credit score. It's a proactive step towards a brighter financial future.
Add to Your Emergency Fund
Emergency preparedness is crucial, yet many find themselves unprepared for unexpected expenses. A startling number of Americans are just one surprise bill away from financial strain. In October 2022, the APA reported the highest number of people experiencing money-related stress since 2015 when 66 percent of respondents said money is a significant source of stress. With your tax refund, you have the perfect opportunity to start or enhance an emergency fund. By depositing a portion of your refund into a savings account and setting up automatic transfers, you're laying the foundation for financial resilience.
Not sure what type of account is best for you? Check out our High-Yield Money Market.This account earns higher dividends compared to a regular savings account and provides you the flexibility to use the funds whenever you need them.
Invest in Your Future
What are your long-term aspirations? Whether you're looking to retire comfortably or save for a loved one's education, it's never too late to start planning. Your tax refund can serve as a significant contribution towards these goals, whether you're just beginning to save or adding to an existing IRA or 529 plan. Consider this an investment in your future and the future of your family.
Enhance Your Home
Investing in home improvements not only makes your living space more enjoyable but can also lead to savings and increased property value over time. Whether it's energy-efficient upgrades like a smart thermostat, solar panels, or simply refreshing outdated fixtures, your tax refund can provide the necessary funds to make these enhancements. This is a smart way to invest in your home's future while enjoying immediate benefits.
Fuel Your Entrepreneurial Dreams
Have you been nurturing a business idea or dreaming of a creative project? Your tax refund could be the catalyst you need to turn those ideas into reality. Whether it's for purchasing a web domain, materials, or inventory, this financial boost can help you take the first steps towards entrepreneurship without jeopardizing your current job's stability.
At Premier America Credit Union, we're committed to supporting our members in making informed financial decisions. Leveraging your tax refund in these ways can contribute to a more secure and prosperous future. If you need guidance or additional resources, remember, we're here to help every step of the way.
Need additional inspiration on spending this year’s tax refund? Check out this online course, Making the Most of Your Money available on Learning Lab+. It’s quick, free, and designed to help you create a game plan for spending wisely.
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*Premier America has partnered with GreenPath Financial Wellness to give members access to additional financial wellness content, including this blog article. Views and opinions expressed in the financial wellness content are those of GreenPath and may not always represent the views and opinions of Premier America Credit Union. Premier America Credit Union is not affiliated with GreenPath, and is a separate entity.