Smart Ways to Use Your Tax Refund
Receiving a tax refund can feel like a bonus, but here are some smart ways to put that money to good use:
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Pay Off Debt: Use your refund to reduce existing debt. Whether it’s credit card balances or other loans, using your refund to pay down high-interest debt can save you money in the long run and improve your credit score.
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Build an Emergency Fund: Use your refund to start or grow your emergency fund. Aim for at least three to six months' worth of living expenses. This fund can provide peace of mind and prevent you from relying on credit cards in the event of unexpected expenses.
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Contribute to Retirement Savings: Invest in your future by contributing to retirement accounts, such as an IRA or TSP. This helps you save for the long term and may also provide immediate tax benefits.
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Treat Yourself (Intelligently): Don’t forget to enjoy a portion of your refund. A small splurge—using only a small percentage of your refund—can be a rewarding way to celebrate.
Ultimately, how you use your tax refund depends on your financial goals. Whatever you decide, make sure it contributes to your long-term financial health.
You have support available from the Personal Financial Management Program (PFMP). Our team provides free financial education on topics such as budgeting.