9 Financially Responsible Ways to Use Your Tax Refund

Before you blow your refund on a sinfully expensive weekend, take a step back and try to determine the best approach you can take with this money. To help you get started, we’ve compiled this list of eight financially responsible ways to use your tax refund this year. 

As tax refund season rolls around once more, it's essential to consider how best to utilize that extra cash. While a weekend getaway may seem tempting, taking a more financially responsible approach can set you on the path to long-term financial stability. To help you make the most of your tax refund this year, Forest Area Federal Credit Union (FAFCU) presents nine smart ways to manage your funds wisely and avoid making mistakes with your money.

  1. Establish or Bolster Your Emergency Fund: A solid emergency fund is the foundation of financial security. If you haven't already, consider using a portion of your tax refund to kickstart this fund or reinforce an existing one. 
  2. Tackle High-Interest Debt: High-interest debt can be a significant burden on your finances. Use a portion of your tax refund to chip away at outstanding debts with steep interest rates. FAFCU offers various loan options to help you manage and eliminate your debt efficiently.
  3. Invest in Your Education: Invest in yourself by using some of your tax refund to further your education. Whether it's attending career-enhancing workshops, conferences, or obtaining additional certifications, investing in education can lead to increased earning potential. Talk to FAFCU about our student loan options to support your pursuit of knowledge and career advancement.
  4. Boost Your Long-Term Savings: Allocate a portion of your tax refund towards long-term savings to bring you closer to your financial goals. FAFCU offers a range of savings and investment products designed to help you grow your wealth over time. 
  5. Prepay Your Mortgage: Making extra mortgage payments can save you a substantial amount of money on interest over the life of your loan. Consider using a portion of your tax refund to make additional payments and build equity in your home. FAFCU offers competitive mortgage options and refinancing solutions to help you achieve your homeownership goals faster.
  6. Home Improvements: Enhance the value of your property and increase energy efficiency by investing in home improvements. This not only adds value to your home but also improves your quality of life. Speak with FAFCU about our home equity loans and lines of credit to fund your renovation projects affordably.
  7. Start or Contribute to a College Fund: Planning for your children's education is a wise investment in their future. Allocate a portion of your tax refund to a college savings fund, such as a 529 plan. 
  8. Invest in Your Retirement: Maximize your tax refund by contributing to your retirement accounts, such as a 401(k) or IRA. The earlier you start saving for retirement, the more time your investments have to grow. 
  9. Opening a Share Certificate or Money Market Account with FAFCU:  Consider opening a share certificate or money market account with FAFCU to further grow your savings.
    1. Our Share Certificates offer a secure way to earn competitive dividends on your deposits. With a minimum deposit requirement of just $500, terms ranging from 3 to 60 months, and dividends paid monthly, FAFCU's share certificates provide a reliable investment option for achieving your financial goals. 
    2. Our Money Market Account, unlike other institutions, doesn't have a minimum balance requirement. Keep in mind however that you earn higher returns with bigger deposits. You can qualify for as much as 4.50% APY* with Money Market Account from FAFCU making it the perfect way to give your short-term savings their best chance at growth.

By considering these financially responsible options and leveraging the products and services offered by Forest Area Federal Credit Union, you can make the most of your tax refund and pave the way toward a brighter financial future.

 

*APY= Annual Percentage Yield. Credit Union Membership required for deposit accounts.