10 Smart Things to Do With Your Tax Refund

[ 0 ] April 17, 2014 |

When we get back a huge tax refund, we sometimes lose the focus that this money was coming out of our own year-long savings plan. Would you take money out of savings to spend it or would you rather take the money out and do something smart for your future? Here are some common-sense ideas on what to do with that fat refund check this year, in order:

1. Pay off credit card debt. This is the highest interest debt you have and the most costly. If you have more debt than refund choose a lower balance card, pay it off completely and set a goal to reduce another one.

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2. Put some money in a retirement account, even a few hundred dollars. An IRA may even get you a bigger refund next year!

3. Make an extra car payment or two, and keep making the regular ones on time. Car loans often have a low rate of interest, but they are just money pits on wheels and building any equity in the car helps in the long run and improves your credit score too.

4. If you have student loans, pay toward the balance. The student loan interest deduction is gone for now, so getting rid of this loan gets rid of the non-deductible interest.

WATCH: Financial Advice for First-Time Investors, From Bank of America’s Joe Quinlan

5. If you’ve made it this far and still have something left, go out to a nice dinner and then move back to the practical side.

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About Bob Jennings, CPA: Bob Jennings CPA, EA, CFP, CITP is a nationally renowned speaker, presenting continuing education classes to over 150,000 tax professionals over the last 20 years all over the world. Bob is also a prolific author [...]
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