Four Ways to Use Your Tax Refund

They say there are only two things for sure in life – death and taxes. If you count yourself among those lucky enough to get a refund, the taxes part might actually be something that you look forward to each year.  But what should you do once you get your tax return?  Here are some ideas:

1. Prepare for an emergency - According to a survey conducted by Bankrate.com, 29% of Americans do not have adequate emergency savings. The recommended amount is roughly the equivalent of 6 months worth of expenses. While it might seem like a luxury to some, it can provide the needed resources should an unexpected situation keep you from collecting an income for an extended period of time.   
2. Pay off debt – A study conducted by Nerdwallet.com found that in Q4 of 2015, the average American had a revolving credit card debt of $15,762 and an overall household debt of $130,922. This staggering figure suggests that paying down debt with a tax return is a very good idea. Pay the highest interest debts first and then continue to chip away at the rest. This simple step is a great way to gain some much needed breathing room and peace-of-mind.
3. Save it – Retirement age comes quicker that most people want to admit. In an article published by The Guardian, it was reported that over half (55%) of American are unprepared for retirement.  Putting your tax return money into an investment tool, will help you create the nest egg you need to retire comfortable. It is recommended to seek the help of a qualified financial planner to ensure that you are putting your money into the best possible investment solutions for your needs.
4. Plan for your kid’s future – Like retirement age, a child’s high school graduation will also come sooner that you can imagine as well. This means helping them realize the next steps in their lives is not far behind.  The current US student debt load is nearly $1.3 trillion with the average debt of the college graduating class of 2016 at $37,172. These frightening statistics make putting a little bit of that tax return money into a college savings plan an excellent option.

Looking for additional ways to utilize your tax return money? Talk to the banking experts at McHenry Savings Bank!  We offer a number of services including investment tips, financial tools and fiscal advice that you can trust.