It’s the most wonderful time of the year! No, we aren't talking about Christmas, we’re talking about tax refund season. Getting a return back on your taxes can prove to be very exciting, but it can also make way for some not so great spending habits that can leave you moneyless very quickly. So, let’s discuss some smart decisions you can make with your refund check! A great way to think about this is setting goals for yourself and your check that will serve you and your lifestyle time and time again throughout the year. And don't worry, we will also talk about how you can squeeze in some fun on a budget for you and your family as well.
No one can really anticipate how life will go throughout the year. Job loss, unforeseen medical expenses, car troubles, and other unexpected costs are situations that can easily send anyone into a tail spin. This is why it is always a great idea to have a significant amount of money stashed away. A common suggestion made by financial experts is to have at least six months of emergency funds saved up. A great option to get you started on the right path, and a terrific bank account* for everyday transactions for you to consider is our ACE Flare™ Account by MetaBank® which allows you to open an Optional Tiered Rate Savings Account. This savings account does not require a minimum balance and it offers a 6.00% APY1 (Annual Percentage Yield) with qualifying Direct Deposit. Having a gameplan when you need it the most is definitely a smart way to spend your refund check.
If you are like most of us, you undoubtedly have some form of debt. That debt may be from credit cards, student loans, medical bills, mortgage, or other things you may owe. Keep in mind that on all of these items there will always be one unavoidable thing that could keep you paying on this debt for longer periods of time: interest. The interest that accrues on all of these forms of debt can really hike things up past the point that your payments never even touch the principal (aka the original balance you owe). If you use your tax refund to pay down your debt, you could be saving money in the long run.
Using your tax return to give back is always a great idea. Whether it is a cause you, a friend, or family member supports, making a donation to further progress benefits the organization and you at this same time. Most charitable organizations rely heavily on donations to keep them running. Many things such as employee payroll, insurance, funding for various programs, maintenance, and other expenses come from donations.
Ensuring your future is secure is an excellent investment to make with your tax refund check. This could mean buying stocks, investing in a business or real estate, or putting money back into your retirement fund. In regards to your retirement, you could put your tax refund check into a Traditional or Roth IRA. Also, if you meet certain requirements, you may be entitled to open an IRA even if you already have a 401(k), 403(b), or other sponsored retirement plan by your employer.
Having the opportunity to take the trip you have always wanted is yet another fantastic way to spend your tax return. Maybe you have always wanted to see Italy? How about Paris? Or even a trip to somewhere right here in the U.S. Either way, you can allocate your tax refund to serve you throughout your trip if you spend it wisely. A few websites to watch for great travel deals around the clock include Kayak, Trivago, Expedia, Orbitz, Airfarewatchdog, Hotwire, Travelocity, Groupon, and more. These sites as well as others offer amazing ways to save with discounts off trips and vacation bundle (flight + hotel) deals.
These are just a few suggested ways you can use your ‘money smarts’ to make sensible choices regarding spending your tax refund check.
The above materials are suggestions and for informational purposes only and not intended as expert advice. For questions on budgeting and money saving ideas, please contact a financial planner. For questions on tax, please contact your tax advisor.
The ACE Flare Account is established by MetaBank, Member FDIC. Netspend, a TSYS® Company, is a service provider to MetaBank. Certain products and services may be licensed under U.S. Patent Nos. 6,000,608 and 6,189,787.