It’s that time of year when we get excited about our tax refunds. By responsibly using this one-time infusion of cash, you can improve your financial standing.
You could wisely use your tax refund to add to your emergency savings account. Most of us do not have enough money saved in the event of job loss, sickness or another unexpected event that prevents us from working. Most financial experts recommend having at least six months of your income saved to help you work through a financial hardship. This fund can also help you cover unexpected or emergency household repairs.
You could also choose to reduce your debt with your tax refund. Paying off high interest debt as quickly as possible is a financial win win because it reduces the principle on your loan and lowers your future interest payments.
Investing in your family’s future is always a wise move as it will continue to guarantee your future financial stability. You could use your return to start or add a college savings fund for your children or start or add to your retirement account.
If you must spend your tax refund, make wise spending choices. Consider purchases that allow you to make improvements that add to the resale value of your vehicle or home or home improvements that lower your energy costs.
More information on family financial education is available by contacting the Letcher County Extension office.