It’s that time of year again: tax time. Sure, there’s Valentine’s Day this month and St. Patrick’s Day next month, but tax season rules this part of the year.W-2s, 1099s and 1040 EZs are the norm. Normally, those things would be enough to make you scream if not for one thing: the possibility of a refund.
A refund is the best part of tax season if you’re lucky enough to get one. To be clear, Putnam Bank is not a tax accounting or advisory firm. However, we do have a few ideas as to how you can use your refund. While you may thoughts of a new TV or expensive toys in your head, our ideas will help improve your finances and allow you to live better.
Give them a read to see which ones could apply to your life.
Make an extra mortgage or loan payment- there’s nothing exciting about making an extra loan or mortgage payment unless you want to save more money. For example, let’s say you bought a home in 2010 and your mortgage was $200,000 over 30 years with a 5.7 percent interest rate. By making an extra payment of $100 every month, you would pay your mortgage off three years and 10 months sooner. Oh, and save a cool $29,232 in interest.
Make home improvements- investing in your home is one of the most important things you can do. From minor fixes to major overhauls, keeping your home updated can increase home value and prevent larger problems, meaning more cash for you if and when you decide to sell your home.
Pay down your credit card debt- most credit cards come with an interest rate in double figures. Letting the balance grow every month means you lose out on money that could be used for something else.
Put it away for your kids’ college education- we all know college expensive, and it doesn’t appear rising prices will end anytime soon. If you have your other financial responsibilities covered, consider setting aside some money in an education savings account.
Contribute to your retirement- for those looking at their long-term goals, an extra boost to your retirement account is a good way to ensure you have enough saved for after you’re done working.
Shore up your emergency fund- at the minimum an emergency fund should have three months of living expenses in it. If you’ve had to dip into your emergency fund, now is the time to start rebuilding it.
Do some good- helping others is never a bad idea. Whether it’s with all or part of your tax refund, donating it or using it to buy supplies, clothing or food for a community organization or non-profit.
Reward yourself a little bit- you can’t be all work and no play. Treat yourself or your family to something fun!
Which of these tips could you put into action in your life? Whatever you choose to do with your refund, be sure that it positively impacts your finances and your life. A new wireless sound system or snowmobile would be great, but they won’t put in you a better place for your future.
If you need help with saving your refund or putting it toward your retirement, call or come by Putnam Bank today.
Putnam Bank, Equal Housing Lender and Member FDIC