Four Ways to Put Your Tax Refund to Work
Tax season is upon us. The filing deadline has come and gone, and some Americans have already received their refund. With an average refund of $3,000, you may be looking for some ideas on how to use that cash and make a smart investment at the same time.
Here are 4 ways you can put your tax refund to work for you:
Pay Off a Small Debt
Put your tax refund toward paying off a high-interest credit card. Start with the credit card that has the highest interest rate. Doing so will save you much more money in the long run. If you have already paid off your credit card debt, think about making an extra payment on your school loans, car payment or mortgage.
Thinking about booking a big vacation? Consider smaller day or weekend trips for the family and invest surplus cash in a fund for future education. Look into 529 plans and Coverdell Education Accounts; these investments offer potential tax benefits as well. Saving for your children's college education now reduces the chances your kids will face heavy student loan debt down the road.
As tempting as it may be to purchase that brand new 80+ inch curved TV, consider making small adjustments in your savings plans that will reap huge benefits later. Increase contributions to your 401K plans and take advantage of the matching opportunities your employer has in place. If you already invest in a 401K, think about contributing to an IRA or Roth IRA account.
Small investments to your home can increase its value tenfold. With the wide range of improvements you may be thinking about – from a new tile backsplash to a new garage door, consider investing your refund in a home standby generator. In fact, the return on installing a standby generator is even greater than adding a bathroom!* Power outages can strike at any time and standby power means immediate restoration of electricity to your home. Cummins home standby generators are safe, permanent backup solutions for your home. Connected to your home’s gas line, they automatically turn on the moment an outage strikes and run powerfully, quietly and efficiently until the outage is over. They’re simply the best choice for backing up your home and ensuring your peace of mind.