Put Your Tax Refund To Good Use

For many of us, a tax refund is the largest amount of money we’ll receive at one time throughout the year, so it may feel like it’s burning a hole in your pocket. I’ve found that my clients at Cowen Tax Advisory Group in Farmington, Conn. who make a plan for their refund before they actually get it are more likely to use the money for long-term financial goals, rather than buying something that only gets you short-term fulfillment.

Here's a few of my suggestions for you to put your tax refund to good use.

 1. Pay down debt  I suggest you pay off your credit card or use your refund to pay down other household debts.  

2. Finance your future Nearly half of Americans say they are still living paycheck to paycheck, that means they likely don’t have emergency funds or savings. I suggest you use your refund to start an emergency fund. I recommend my clients have 3 to 6 month salary on-hand. Or use your refund to build up your retirement accounts. Cowen Tax Advisory Group can help you craft a retirement plan.

3. Start a gift fund There are two shopping seasons people often overlook when putting together their yearly budget. Holiday shopping, where people spent nearly $800 last year, and the back to school season where families spend an average of almost $700.  I suggest you put money into an account now for those two seasons to help you avoid busting your budget later in the year.

4. Prepare for repairs Whether it’s your car or your home, expect the unexpected.  You can set aside your refund for any surprise repairs, or start saving for the kitchen remodel or new car you’ve been dreaming about. It’s better to have money set aside, so you are not financing the costs and adding to your debt.

5. Help your kids You can use your refund to open or add to a college savings fund for your kids or grandkids.

Need help with your finances? Cowen Tax Advisory Group can help. With more than 35 years in the business, we treat our clients like family, we have old fashioned values and we take pride in our work. Find more at cowentaxgroup.com

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