Tax return season is here, which means there’s a chance some extra cash is coming your way. Before you indulge in a tropical getaway or pre-order VIP concert tickets, take the time to responsibly consider your financial situation. That doesn’t mean you shouldn’t treat yourself—just make sure your spending is aligned with your financial goals.
Here are some tips to help you get the most out of your tax return. Follow these steps to learn how you can put yourself in a favorable financial position and have some fun along the way!
Stash some away. Saving should always be a top priority. Be sure to set aside some cash for upcoming expenses like monthly bills, home renovations or retirement contributions. It’s also smart to keep some tucked away for unexpected circumstances (e.g., auto repairs, medical emergencies, etc.). You probably won’t feel a rush from saving, but you’ll always look back and be happy that you did.
Put a dent in debt. Another savvy way to put your tax return to use is by cutting into your debt! Starting with high interest debt, pay down those bills to relieve some of your financial burden. As a rule of thumb, try to pay off your credit card bills first, then work your way toward other debt like car payments, student loans and so on. Reducing debt will allow you to gain solid financial footing and focus on your future financial goals.
Pay it forward. If you have the ability, consider the gift of giving. Making a charitable donation improves the lives of others in need and makes you feel good, too. You can also write off donations on your taxes, meaning you’ll get a bigger return in 2018. Wondering where to donate? As a member-owned cooperative, Summit Credit Union always has information on Madison-area charities and philanthropic organizations that accept donations. You can also learn more about the other ways we give back here.
Treat yourself. Finally! Once you’ve paid down some bills and set money aside for the future, it’s time for the fun stuff. Cross off the bucket list trip you’ve been dreaming of taking. Splurge on a new purse or pair of heels. Indulge in some self-love with a day at the spa. You deserve to spend some of your hard-earned money on the finer things. Just remember not to get carried away. In order to get the absolute most out of your tax return, try to maintain at least a 50/50 balance between saving and spending.
There you have it! Try out these strategies to get the most out of your tax return this year. If you need help putting your tax return to good use, Summit is always available to talk through savings and investment options.