According to the latest IRS data, nearly eight out of every 10 Americans will receive a tax refund. UGA Cooperative Extension experts suggest using these smart strategies to help you maximize your refund.
• Catch up on bills. If you have outstanding bills or bills past due that are accruing interest and late fees, put your refund toward these first.
• Assess your overall debt and credit situation. Who are your creditors? If you have multiple accounts from which to choose, begin paying the one with the highest interest rate to save the most money in the end.
• Create or increase emergency savings. When the tire goes flat, the car battery needs replacing or the washing machine breaks, money in an emergency account will let you pay for these expenses without adding to your debt load.
• Invest in your retirement. Opening an individual retirement account or making extra contributions to an existing retirement fund is an excellent use of tax refunds.
• Invest in your home. Tax refunds can be used as a down payment for a potential home or to pay an extra mortgage payment for your current home. Tax refunds also are great for home improvements, which add to the overall value of your home.
• Don’t forget to share. Donate a portion of your tax refund to the charitable organization of your choice.
• Finally, splurge a little to reward yourself. Make a pleasure purchase, like a new television or a family vacation.
Source: UGA Cooperative Extension