By: Teresa Baumann, AFC ®
Financial Counselor
What should I do with my tax refund?
Tax season is officially over. You may have received a refund or you may have owed some money. If you received a refund, that is great news. But, what should you do with the money?
You may be tempted to go buy something you’ve been wanting for a while. Or maybe you are thinking about planning a summer vacation and using the money for that. While these things can be okay to spend your money on, there may be some financial needs that can be taken care of as well.
- Do you have credit card debt that could be paid off?
- Do you have at least $1,000 in an emergency savings account?
- Do you have any medical debt that could be paid off?
The financial needs are not as fun to spend money on, but they can relieve a lot of stress once they are paid.
A balanced approach can work well for most people. Use some of your tax refund for fun and use some towards savings/debt reduction. It will give you the best of both worlds!
**Please note that if you receive a refund greater than $1,000, you may want to adjust your W4 with your employer so less taxes are being taken out throughout the year. This will increase your paychecks every month!