It’s time to start thinking about your income taxes. If you’re one of 96 million Americans who receive an income tax refund, you have some options for what to do with the money. The average refund amount is $2,725. Today’s blog from Volt Credit Union explains five financial strategies for your income tax refund.
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1. Create an Emergency Fund
Financial experts say you should save six months’ of expenses as an emergency fund in case something unexpected happens. Consider setting up an emergency fund with a savings account. That way, your money accrues interest over time. Volt Credit Union can help you develop a savings plan in a share account that maximizes your investment with us.
2. Plan for Retirement
Deposit some or all of your income tax refund into a retirement account. The beauty of retirement savings is that it may earn a higher interest rate compared to a share account. The employees at Volt Credit Union will explain the ins and outs of retirement savings with an IRA, 401(k), and other options relevant to your situation.
3. Make Home Improvements
Home improvements not only increase the value of your home, but they can recoup money over time. New home insulation, an improved HVAC system, energy-efficient appliances, solar panel installations, and more can all save you money on utility costs over time. The longer you own your home, the more money you save.
4. Pay Down Existing Debt
Paying down existing debt decreases your debt load, but it could also improve your credit rating. Did you know that making one extra mortgage payment per quarter allows you to pay off your mortgage 11 years early while saving tens of thousands of dollars in interest? Volt Credit Union offers mortgages, and we’ll help you get the most out of your financial windfall if you choose to make extra payments.
5. Invest in Yourself
Have you thought about going back to school? What about investing in a new computer so you can maximize your productivity in your home office? Invest your income tax refund in yourself to further your career, enhance your formal training, increase your income by taking classes, improve your home office, or join a professional organization. There are plenty of options out there for your career to take off, and a new year with a new income tax refund can help with those efforts!
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Need More Ideas? Volt Credit Union Is Here!
Do you need more ideas for how to invest your income tax refund? Contact Volt Credit Union today and we’ll give you some more tips. We want you and your family to be financially sound!