What to do with your tax refund

Tax Day is just around the corner. If you’re not expecting a refund, you’ll most likely file your return as late as April 18. If you’re getting money back, however, you’ll likely want to file right away.

What will you do with your refund? We’ve covered a few of your options below.

Save it

Seems simple enough, right? Just because you receive a large lump-sum of money doesn’t mean you have to spend it all right away. It may feel as if you hit the lottery, but spending unnecessarily may lead to regrets later. Instead, start a regular savings habit that will help you create a financial nest egg that will help provide a stronger financial future.

Eliminate high-interest rate debt

Are you stuck with a recurring balance on a few high-interest credit cards? This may be a good time to chip away or pay off that debt. A 25-percent interest rate can add up to significant debt to your existing balance over time, to a point where you’re only paying off the interest and not the capital or existing balance. If you pay this debt off with your tax refund, you’ll be able to save money that would have gone to interest-rate payments. Even if you don’t have a high-interest rate balance, it may be beneficial to save that money for a rainy day.

Ok, treat yourself a little bit

Fine, it wouldn’t hurt to spend a little bit of your tax return, say 10 percent at the most. Just keep in mind that unexpected expenses are just that, unexpected, so having some cash saved is always a good thing. And receiving a tax refund makes it that much easier to do that.

Ready to deposit that refund into a savings account? Visit our website to see how a Travis Credit Union Target Savings Account can work for you.

Target Savings