Smart Ways to Use Your Tax Refund
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Approximate time: 30 seconds
Are you expecting to receive a tax refund this year? Refunds are always a nice surprise, but they also present a great opportunity to make some sound financial decisions that will reap benefits now and in the future, according to the Michigan Association of CPAs. For example, if you have high-interest credit cards, hefty student loans or any other debts looming over your financial landscape, CPAs recommend that you use some if not all of your refund to pay them down as much as possible. If you pay off a credit card with a 16% interest rate, you’ve just gotten yourself a 16% return on your money—-a nice bonus that’s higher than the regular return on most investments. Once you’ve wiped the slate clean of outstanding debt, you can use your hard-earned money to save up for dream purchases. But if you don’t lower your debts, that money instead will be wasted on interest charges. If you have questions about smart ways to use your tax refund, your local CPA can advise you on any of the financial questions facing you and your family.
