“Spring Cleaning” Your Finances

The deadline for filing your taxes was April 18th, so there’s a good chance that by now you’ve received your state and federal tax returns. If you read our last blog, hopefully you were able to get a bigger tax return. So how can you make that money go further now that you’ve got it? Here are our tips on how to make the most of your tax refund:

• Save for emergencies. Open or add to a high-yield savings account that serves as an emergency or “rainy day” fund.
• Pay off debt. Pay down existing balances either by applying your refund to your higher-interest loans or using it to pay off smaller debts.
• Put it toward a down payment. It’s hard to save up for a down payment on a house or vehicle. Save your tax refund to use as or put toward a needed down payment.
• Invest in your home. Put your tax refund toward home improvements. This is considered an investment that will pay you back down the line by increasing the value of your home.

In addition to stretching your tax refund, spring is a great time to refresh your finances. Reevaluating your expenses and budget now can help you manage your money for the rest of the year. Here are three great financial “spring cleaning” tips from the American Bankers Association:

• Evaluate and pay down debt. Take a look at how much you owe and what you are paying in interest. If there are better rates available now, consider requesting a lower credit card interest rate or refinancing your mortgage. Begin paying off your existing debt, either by chipping away at larger, higher interest loans or by eliminating smaller debt first.
• Review your budget. Update your budget to reflect any changes in your financial situation that may have come up over the past year. Determine what expenses demand the most money and identify areas where you can realistically cut back. Develop a strategy for spending and saving and stick to it.
• Check your credit report. Every year, you get one free credit report from each of the three bureaus. Take advantage of these free reports and check them for any possible errors. Mistakes can drag down your score and prevent you from getting a loan, or cause you to pay a higher than necessary interest rate.

Being smart with your tax refund money and refreshing your finances now will alleviate potential headaches when it comes to managing your money for the remainder of the year. At McHenry Savings Bank, we’re pleased to provide mobile banking and funds management tools to make it even easier on you! With our mobile app, you can check your balances, establish alerts, and transfer funds - all on the go! For more information or to see what else McHenry Savings Bank can do for you, don’t hesitate to give us a call or drop by one of our locations.