Tax refunds are on the way! While you may be tempted to spend it and get the “fun” out of your refund, remember you also have a great opportunity to a nice chunk of change and invest it. In that spirit, we have compiled a list of suggestions on how to use that refund check to better your finances.
- Create an emergency fund: Set aside some money from the refund for unexpected expenses. According to recent studies, 77% of Americans aged 35-44 say lack of money for a “rainy day” is their main source of stress. Setting aside some of the windfall from your tax refund can ensure you are prepared for unexpected bills, and ready to handle emergencies.
- Pay off debt: Interest charged on debt is at an all-time high, and the longer that it takes you to pay off your bills, the more money you will end up spending. Allocating a portion of your tax return toward making an extra payment on a student loan, credit card debt, or other bill, will help to save money in interest over time. Make sure you document any extra payments made, and that they are reflected on your next monthly statement.
- Consider starting or investing in your retirement account: Contributing to retirement plans like an IRA, or Roth, or a 401(k) are a great option for a portion of your refund. Rather than spending your entire refund, think of the peace of mind that will come with preparing for the future. In 2024, you can contribute up to $7000 to a Roth IRA, and $8000 if you are 50 or older.
- Enhancing your professional skills and earning power: Enroll in professional skill or language classes, get that extra certification that will give you a bump in salary, or learn something new like how to play a musical instrument. Or, do something fun like taking cooking classes.
- Increase your income even more: Use your refund to launch a side gig or turn a hobby into the business idea you’ve been dreaming of.
- Home Sweet Home Office: Last but not least – since many are working from home, make it a more productive or pleasant experience by using your refund to spruce up your home office. It will make you look good on Zoom!
CONTACT US: Every dollar comes with a decision – but don’t spend it or save it without a plan. While it may be tempting to go on a shopping spree for a new flat screen TV or a new pair of Manolo’s, that virtually guarantees your windfall won’t last. Consider your options for saving, paying down debt and spending the money on things or experiences that could yield a financial, physical, emotional or professional benefit. Feel free to contact Cory Lyon, TFG Financial Advisor, directly at 561-209-1120 or clyon@tfgfa.com., if you want to create a financial plan to reach your goals.
TFG Financial Advisors, LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results. Investments involve risk and are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.
