Ah, the good old tax refund. It’s like an extra pay day, isn’t it? While it may feel like you’re getting “extra” money, you’re really just getting back what was kept out of your paychecks throughout last year. If you had that money in the first place, you probably would’ve been responsible with it, so it makes sense that you should do the same when you’re refund arrives in your back account or in your mailbox.
Last year, the average tax refund was $2,790, which is a good amount of money for most families. Alpine Bank has come up with 10 ways you can use your chunk of change from Uncle Sam a little wiser this year:
Pay off high interest debt- credit card debt is the main culprit here, with most credit cards having an interest rate of 11-16 percent. That’s debt that stacks up against you quickly.
Start a down payment fund- if you’re looking to purchase your first home or move your family, your tax refund can serve as the foundation for your down payment.
Invest in your retirement- any money saved now will grow and be there for you in retirement.
Contribute to your emergency fund- the 2008 recession taught us you can never have enough easily accessible cash saved up.
Seek financial advice- finance books are widely available, and most can be very beneficial. Just make sure you do a little research on the author first.
Make an extra mortgage payment- fun fact: making an extra payment on a $250,000 30-year mortgage with a 5 percent interest rate shortens the mortgage by five years and saves you about $41,000 in interest.
Do good- don’t need the extra money? Make a donation to your favorite charity or community organization instead.
Invest in yourself- your own education is the best investment you can make, especially if you want to increase your earning power.
Do something new- take a cooking class, go wine tasting or find another way to expand your life.
Treat yourself- make sure it’s something you need, and try to buy local to keep money in the local economy.
Your tax refund is your chance to do something productive. Big screen TVs and new tablets are nice, but do they help you achieve your goals? Just something to think about as you await your tax refund this year.