For the best of us, saving money is like trying to eat healthily. Any impulsive choice like eating junk food might make your happier now, but hurt you in the long run. As the April deadline approaches fast, it’s high time you begin to think of wise ways to invest your fat tax refund check.
Consider the following six nifty ways to save your tax refunds, and set yourself up for success.
1. Open a Dedicated Emergency Fund Account
It’s a reality that most people don’t have sufficient savings accessible in case of a financial emergency. You can be surprised by medical emergencies, employment loss, and major home or car repairs, to name a few. Avoid being stuck in an emergency situation by setting aside part of the tax refund toward your emergency fund.
2. Throw Part of It at Your Mortgage or Home Loan
Paying off your home loan or mortgage sooner than later will save you lots of money on interest charges. So, throw a portion of the tax refund on your mortgage. It’ll go a long way to ensure that you pay it off in years rather than decades.
3. Deposit Directly into Your Savings Account
Your hefty tax refund check is a great opportunity to stash some money in your savings account. The good news is that the IRS allows you to split the check in up to three accounts via direct deposit. Consider a Money Market Account at MACCU!
4. Pay Off High-Interest Debt
If you have a couple high-interest credit cards, consider using the tax refund to pay off the balance. This way, you will get rid of debt that is tying you down.
5. Seed Your Children’s College Fund
It’s always a wise decision to start saving for your little one’s college fund early. You’ll be doing your child or grandchild a massive favor by setting up a 529 Plan. It’ll help them afford higher education in the age when rising cost of living is leaving graduates with enormous student debt.
6. Put Some in the Stock Market
The stock market often offers higher ROI than bonds, CDs, and even savings account. While it might be a little risky choice, investing your tax refund in stock exchange might put you in a stronger financial position.