10 Smart Ideas for Your Tax Refund

posted 4/9/2014 in General

The tax deadline is nearing!  While many of you have already filed your taxes and had your return deposited into your bank account, our guess is that some of you may be debating what to do with your refund. At Lincoln Savings Bank (LSB), we’re all about wise money management, so we’ve come up with some smart ideas for your tax refund. These ideas are ones that will help you reach your financial goals, so take a look!

Reduce Your Debt

  • Pay off credit cards- since credit cards carry higher interest rates than most loans, you can save yourself money by paying off the balance and eliminating interest payments.

  • Make an extra mortgage payment- not only does this help you pay down the principal, but it also can save you hundreds or thousands on interest payments over time.

  • Student loans- if you have private loans, go after those first since they tend to have higher interest rates.

  • Vehicle loans- get your vehicle paid off once and for all by making payments toward the principal of your loan.

Saving & Investments

  • Contribute to an IRA- a Traditional IRA gives you tax breaks now, while Roth IRAs give you tax breaks when you are withdrawing funds in retirement. Sock money away now to let it grow.

  • Build up your emergency fund- having at least six months of expenses saved up puts you in a great position should something unforeseen happen.  Loss of a job or unforeseen medical expenses can be devastating if you’re not prepared.

  • Save for your kid’s education- making contributions to a 529 plan lets you help your children, and Iowa has tax-friendly benefits for contributing to a 529 plan.

Fun, Education and Charity

  • Invest in yourself- take a college or technical course, or find another way to increase your knowledge and skill set. You are your best asset for earning a living, and your education is a great investment.

  • Fix your vehicle or home- these are two things you lean on every day of your life, so making sure they’re in the best condition possible can help prevent more expensive repairs later.

  • Try something you’ve always wanted to do- whether it’s going skydiving or restoring a piece of furniture, give it a go! You may find something you can turn into a side business.

There are many ways you can put your tax refund to good use. Leave us a comment on our Facebook page of any ideas you have!          

Lincoln Savings Bank, member FDIC

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