9 Ways to Invest Your Tax Refund
It’s easy to fritter away your tax refund on little splurges. Why not use those dollars to brighten your long-term financial picture?
Here are nine ideas.
- Establish or add to an emergency fund. The goal is to have at least three months’ salary set aside for the unexpected, whether it’s a job loss, a medical event, or a costly home repair.
- Pay off credit cards and other debt with high interest rates.
- Invest in home upgrades – new insulation, Energy Star appliances, and a programmable thermostat – that increase your comfort and reduce utility bills.
- If you’re selling a property, talk to your real estate practitioner about how to spruce up your house to make it more saleable. Small landscaping projects may boost curb appeal and bigger investments – a bathroom or kitchen remodel – could help you sell the property faster and for more money.
- If you’re saving to buy a house, funnel the money to your down-payment fund or earmark it for home-buying expenses, such as closing costs.
- Make an extra deposit in a retirement or college savings account.
- If you have a Health Savings Account, add money to that for a rainy day. The 2016 contribution limits are $3,350 for individuals and $6,750 for families. Those over age 55 can make a $1,000 catch-up contribution.
- Make an extra payment toward the principal on your mortgage. Extra payments don’t change the monthly amount that you’ll owe, but they reduce the length of the mortgage and the amount of interest you’ll pay over the life of the loan.
- Plan for upcoming expenses, whether that’s buying school uniforms or school supplies for your kids this fall or buying books or paying for room and board for a college-bound child.
Liberty Bank can help you use your refund wisely. For advice, stop in and talk with a Personal Financial Services Representative.