How should YOU use your tax refund?
Most of us look at April 15th each year with a bit of fear and anxiety it's time to get our taxes ready to send to the IRS. That acronym alone can cause a lurching feeling in your stomach, right?
If you're one of the lucky ones who still receive either a state or federal refund or both this may be the time to consider purchasing one of those "wish" items you've been waiting for. However, before you spend your tax refund on your "wish list," consider these three tips first.
- Pay off bills Make sure you catch up on any bills you may have fallen behind on during the past year. Starting with your highest-interest rate accounts first (e.g. credit cards) may save you a lot of money in the future.
- Save for needs throughout the year Setting up an emergency fund for yourself is a very smart idea. This "rainy day fund" can be used for small emergencies such as a pipe bursting or unexpected car repairs. It can also be useful for those bigger bills that come once a year or every few months or for the ultimate emergency unemployment.
- Don't forget your long-term savings Regardless of your age, try to set some money aside for your retirement plan. This is a great opportunity to add even a small amount which will help in the long run.
Once you've set aside part of your refund for the areas listed above, you can then consider splurging on an item from your "wish list"... like a new sofa, an iPad or even a vacation. Determine which item on your list is most important and then happy shopping!
We'd love to hear how you plan to use your refund! Visit our Facebook page and share your thoughts!
For more information about using your tax refund wisely, visit ISU Extension.