Ready, Set, Refund Time

For the next couple of months some residents will be heading to their mailboxes to retrieve their Tax Refund check. The question now becomes “How to spend the extra money”? A quick trip to Vegas, a shopping spree or a night on the town may be what you want to do with your money but it may not be the wisest choice. It is not easy, but there are sensible ways to put your refund money to work for you.

Paying off debt is one way to apply your refund money. While getting rid of debt may lack excitement, it is a priority to your financial freedom. According to financial expert Connie Mack, “paying off your debt will gain you financial strength”. “Guarantee yourself a return, whether it is a low student loan interest rate or a high credit card rate. You are guaranteeing yourself returns by not having to pay that interest rate in the future” says Mack on paying off debt.

Another option is to apply your money to an emergency fund. With looming layoffs and high unemployment levels an emergency fund is imperative. Finding a job is now taking longer as the economy continues to recover. Mack believes a goal of 12 to 18 months worth of living needs to be saved versus the normal 6 months recommended.

Retirement and education are wise choices to place your money. According to Mack “Lack of pensions puts more responsibility on the worker to save for retirement”. Saving now will allow you a more secure future. Securing you child or grandchild’s education cost is another option. There are many funds including the Texas Tuition Promise fund that can be started with your tax refund.

You may choose to spend your refund on home improvements or a charitable donation which could earn you a tax credit. These are both rewarding acts. In regards to a home improvement it is far more rewarding if you will be in the home for at least 10 years. Make sure you get the worth of your home’s investment.

Your tax refund check will be arriving soon. How will you spend it?