Getting a tax refund this year? If you’re like most of us, you have a long list of ways to spend that refund. Though saving your tax refund isn’t exactly the most exciting option on the list, a little financial discipline now can have big impacts for your fiscal future.
Here are three ways to get the most from this year’s tax refund.
Pay Off Your Debt
Have some credit card balances hanging around from the holidays? Using your tax return to pay off debt—especially high-interest credit card debt—can improve your credit score and lower your monthly bills. A major factor in determining your credit score is the amount of debt you have. Paying down or paying off your debt improves your credit utilization ratio—the amount of your credit limit you are using.
Lowering how much of your credit you are using will most likely boost your credit score. And, of course, if a credit card is paid off, you’ll have one less bill to worry about every month.
Start a Rainy-Day Fund
Admittedly, given our typical Pacific Northwest weather this time of year, you may want to call this fund something besides “rainy day.” But whatever you call it, having an emergency savings fund is a smart way to make sure you are prepared for the unexpected. Salal gives you a variety of savings options, including Share Certificates, IRA Savings and Certificates, Premium Plus Money Market accounts, and Basic Savings accounts that are great options if you are just getting started. Each of these savings accounts has their own unique benefits and features.
Invest in Your Future
Investing your tax refund can be a good way to give your retirement savings a boost or start saving for future education expenses. Adrian Hedwig, CFS* Financial Advisor at Salal Investment Services, can help you get started. Even if you have never invested before, Adrian can help you:
- Determine your investment goals, timelines, and risk tolerance
- Create an asset allocation model
- Select specific investments
- Manage, monitor, and modify your portfolio