April 1, 2022Smart Ways to Use Your Tax Refund
It’s that time of year again. While some people are biting their nails over how much they’ll have to pay, others are eagerly anticipating their refunds from Uncle Sam. Below are a few smart ways you can put your tax refund to work for you.
Make a Down Payment on a New Car
If you’ve been thinking of trading up or buying a new car outright, your tax refund can help you bolster your down payment, so you pay less for the vehicle over time. The larger your down payment is, the more you save on interest.
Use It to Help Pay Off Existing Debt
Sometimes, the best place to use your tax refund is on your debt. Reducing your debt can boost your credit score by improving your credit utilization ratio. It can also save you money in interest over time and lift a huge weight off your shoulders. Even better, that frees up your finances for more positive and productive future pursuits.
Save It for Part of Your Down Payment or Closing Costs on a Home
If you’ve been dreaming of buying a new home but haven’t been able to save the money to do so, your chance is now. When combined with first-time buyer programs, your tax refund might be the difference-maker when it comes to buying a home. What a huge gift to yourself and your family!
Remember, when purchasing a home, the larger your down payment, the less you’ll ultimately have to pay in interest on your home.
Add It to Your Emergency Fund
Just think of the difference it can make to your emergency fund to have that extra money to help smooth things over on rainy days. The goal for most families is to have a rainy-day fund that can help with managing living expenses for at least six months of missed work. After the great recession, many financial advisors recommend saving up to cover a full year of expenses.
If you have a home, own a late model car in good mechanical condition, have paid down most of your existing debt, and have a sizable emergency fund, the next best thing you can do with your tax refund is invest it. Investing gives you the opportunity to really put your money to work for you. From IRAs to education savings accounts for your children, PEFCU have investment options that can get you started. Just reach out for help.
Save a Little for Something Fun!
There’s nothing that says you can’t have a little fun with your tax refund! After all, YOU earned it! Put a little bit of that money toward a fun family adventure or a special night with the love of your life. Or even buy yourself that goody you’ve had your eye on for months.
We’re Here to Help!
Whether your goals are to build wealth, purchase a home, buy a car, or pay off existing debt, your tax refund is a great way to speed up the process. Simply stop by any branch location or give us a call at 1-800-226-6673 to learn about the many ways we can help with all these things and more.
Each individual’s financial situation is unique, and readers are encouraged to contact PEFCU when seeking financial advice on the products and services discussed. This article is for educational purposes only; it does not constitute legal advice. If such advice or a legal opinion is required, please consult with competent local counsel.