Receiving a tax refund can feel like a financial windfall, which can lead to some ill-advised purchases that you may later regret. Before you buy things you don’t need, consider ways to make your refund work for you. Here are some smart ideas to maximize it:
- Pay Down Debt
High-interest debt is enemy #1 to your financial picture. Credit cards or personal loans can drain your finances and keep you from building long-term wealth. Using your refund to make a lump-sum payment reduces interest and helps you become debt-free faster.
- Boost Your Emergency Fund
Aim to have three to six months’ worth of expenses saved for emergencies. If your fund is lacking, your refund can provide a much-needed safety net. After high interest debt, look to build up your cash reserves to help insulate against unexpected expenses.
- Invest in Retirement
Contributing to your 401(k) or IRA is a fantastic way to grow your wealth over time. Consider increasing your contributions or making a one-time contribution to an IRA or brokerage account.
- Invest in Yourself
You may not think of it, but a windfall can be a great opportunity for education, certifications, or skills training that could boost your earning potential. Consider ways you could also earn tuition reimbursement if your employer allows for it.
While it feels good to get a refund, it could be a sign you are withholding too many of your hard-earned dollars for taxes.
Did You Know?
Your employer sponsors this financial wellness benefit from Francis LLC. The benefit connects you with down-to-earth financial planners who educate and advise on any money matters…without the sales pitch. We are exclusively engaged by employers like yours and have no investment products to sell, so you can feel confident that you will always receive objective advice.
Your financial planner will help you set priorities and achieve your money goals, without judgment or financial jargon. Know that all discussions are kept strictly confidential. This service is offered as an employee benefit with no per-session co-pays, so you can meet with a financial planner as often as you wish. Services are paid by your retirement plan or your employer.
Connecting with a financial planner is easy! Here’s how:
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- Visit FrancisWay.com > Services > Participant Portal
Download the free
mobile app (Search for
Francis LLC)
Visit the Learning Library
