Getting a tax refund is great, but you can turn it into something even better—an investment in your long-term financial success! Consider these options for making the most of your refund:
Pay down your high-interest credit card debt.
If you don’t pay off your credit card balance each month, you end up paying interest on the interest, and your debt piles up fast—especially if you are making the minimum payment required. Use your tax refund to pay down your credit card balance, reducing the amount of interest you’ll pay over time. Then, put those savings toward paying off even more debt, breaking the debt cycle.
Build your emergency fund.
Get the peace of mind that comes from having a financial cushion. You can use Excite’s Emergency Fund Calculator to set a savings goal. To maximize growth and get easy access to your money, put your tax refund into a high-yield savings account, such as our Voltage Save & Spend. With an emergency fund in place, you’ll be prepared for unexpected expenses—without relying on credit cards.
Pay down your student loans.
If you stick to a standard loan repayment schedule, it could take many years to eliminate your student loans. Use Excite’s Student Loan Payoff Calculator to find out what it would take to pay off your student loans early. Use your tax refund to get the process started, and you’ll end up saving a lot of interest.
Prepare for your retirement.
The earlier you start saving for retirement, the more you’ll benefit from compound growth, securing your financial future. Consider opening a Traditional or Roth IRA, based on your financial goals and tax situation. If you’re behind on your retirement plans, using your tax refund to help catch up is a smart move that can make a big difference down the road.
Make necessary home and auto repairs.
Delayed maintenance often leads to more expensive problems. If you have a leaky roof or an overheating engine, use your tax refund to get them fixed right away. If you wait, you may be forced to pay higher repair bills in the future, or you may spend even more money on replacements.
Save for a long-term goal.
Start putting away money for a big dream, such as a home down payment. Consider using your tax refund to open a Share Certificate, which offers a higher interest rate than a regular savings account. With a minimum of $500, you can choose a length of time from six months to five years. When your Share Certificate matures, your future self will thank you.
Save for a short-term goal.
Instead of treating yourself to a small reward now, save for something meaningful—a special anniversary trip or a debt-free holiday season. Use your tax refund to open a Go Savings account or an Additional Savings account dedicated to your goal. If you keep saving regularly in the coming months, you’ll soon enjoy the rewards of your efforts.
Want to learn more smart ways to handle your money? Explore Excite Credit Union’s wide range of free financial education resources. Visit excitecu.org to discover how we can help you create a financially stronger future—starting today!
