Did you know that federal tax refunds this year are expected to be, on average, about $1,000 more than tax refunds were last year?
More money is always nice, but it can also be more money to mismanage if we’re not careful. So here are some tips to help you maximize the benefit of a larger refund:
Have a plan. Estimate what you will do with the money if you receive a $1,500, $2,000 or $2,500 refund. Come up with a list of things that are most important to you. It’s okay to have some fun with your money, but be sure to prioritize your needs over your wants.
Sometimes needs and wants can blur together. You might need a new refrigerator, for example, but you don’t necessarily need a $2,000 refrigerator. If that’s a major goal for you and you can afford it, that’s fine. But oftentimes we can rationalize a purchase that we cannot afford. Some people may need to get a $1,200 fridge and put the rest of that refund money towards a new set of car tires or pay off a credit card bill, perhaps.
Focus on what debt you want to knock out, or pay down, with your refund. Or perhaps pay ahead on your next mortgage payment for a little extra breathing room. Take a look at your financial situation and your goals and go from there! If you need some professional assistance with that, you can always talk to one of CCOA’s certified credit counselors. Click here to make your free appointment.
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