University of Illinois Extension
Making the Best Out of Your Tax Refund

 

[March 08, 2019] 

If you are expecting a tax refund check soon, here are a few tips from americansaves.org to make the most out of your tax refund:

Remember that it is not “extra” money: most of it is the hard-earned money that you worked throughout the year.

Come up with a plan for your refund. Decide how this money will help you to establish or maintain financial stability.

Use your refund to build a rainy day fund.

Recent studies revealed, "40% of the population is unable to meet an unexpected $400 expense without going into debt" (e.g., taking care of a car problem, replacing a busted sump pump in your home, or replacing a damaged cellphone). A rainy day fund helps build your sense of security in case the unexpected happens.

Use your refund to pay down/off credit card debt.

By getting rid of past debt or high-interest credit card debt, you can focus on your future financial goals.

Use your refund to invest in your future.

Plan for retirement: consider contributing to an Individual Retirement Account (IRA) or 401K. Once established, set up automatic payments from your paycheck.

Establish a 529 savings plan to save for your child's education.

For more tips on how you can save money and build up your nest egg visit americansaves.org.

[Camaya Wallace Bechard, Consumer Economics Educator, University of Illinois Extension]