SAVING AT TAX TIME – HOW TO USE YOUR TAX REFUND

Are you eagerly anticipating your tax refund this year? Do you know when is tax return deadline for 2017? Many people view tax refunds as a bonus check or as a gift from the government and they use it for splurges or treats. On the other hand, many people view it as an ideal opportunity to improve their financial situation. If you are expecting a tax refund this year, make sure you use your it wisely to achieve your financial goals.

How to Know Tax Return Deadline?

Deadline to file your Income tax return each year is supposed to be April 15 but if a tax return deadline falls on a Saturday, a Sunday or a holiday, it is moved to the next business day. Tax return deadline for 2017 is April 18, 2017, instead of the traditional April 15 deadline.

Start or Rebuild Your Emergency Fund


An emergency fund can be your best friend to provide you with a financial back-up in an emergency. An emergency fund is an account in which you deposit money to use in an emergency like if you lose your job, are unable to work due to a medical emergency, and your car breaks down, can pay the bill without going into debt or have to deal with other unexpected expenses. You can use the extra cash from your tax return to increase your emergency fund.

Many financial experts recommend that you should have at least six months of living expenses in an emergency fund. If you do not have an emergency fund yet, start building an emergency fund by putting your extra cash in a money-market account or regular savings account or a high-interest savings account.

Pay Off Credit Card Debt

You can save your tax refund to spend it to pay down or pay off your credit card debt. The credit card, use it to pay off the high-interest balance first. Eventually, you will end up paying fewer interests and fees in the future, especially if you are using a high-interest credit card.

Put Your Tax Return into Savings

You can save your tax return money for a rainy day. You can put the money into a savings account. Open a regular savings account or open a high-interest savings account. Your tax return will continue to grow if you put your refund into savings. You can also Tax refund money to pay off a significant bill or deal with unexpected expenses.

How to use tax refund

Save Your Tax Refund Toward Longer-term Savings

If you have enough cash on hand, you can try to keep your tax return toward longer-term savings like putting it into retirement savings or other longer-term investment accounts.

Pay Down a Debt

Paying down your debt should be one of your top financial goals to get out of debt as soon as possible. You can use your tax refund to pay credit card bill, old tuition bill, etc. Saving your refund to spend it to pay down debt will help eliminate not only your debt but also interest and fees in the future

Invest in a Mutual Fund or Stock

Use your tax refund to buy shares in a mutual fund or stock. But make sure you are completely aware of the risks associated investing your extra cash in the mutual fund or stock.

Invest in Tax Time Savings Bonds

A great way to use your tax refund money is to invest it in Tax Time Savings Bonds.Use your tax refund to buy shares in a mutual fund or stock. But make sure you are completely aware of the risks associated investing your extra cash in the mutual fund or stock.

In Conclusion

As you can see, a tax return can provide you with the opportunity to save toward an emergency fund, retirement savings, paying down debt, starting a business, paying for a vacation, etc. goals. You could also contribute to your child’s college tuition. Saving your tax return instead of blowing it out will benefit you and your family over the long term.

 

 

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Razia Rahman

Razia Rahman

Owner, Super Moms Make Money. Content Writer and Editor.