By Coach Fin
If you’re expecting a tax refund or stimulus check, it’s tempting to splurge on something that will be a nice distraction. The coronavirus (COVID-19) social distancing and shelter-in-place practices might make a new 4K TV sound like the perfect investment. It might help you pass some time with your family, but before you jump on the next online sale, think about what will serve you better in the long run. Here are four ideas for making your tax refund serve you well into the future.
1. Pay down bills and debt
It might not give you the same rush as buying the latest gadget, but you can reap bigger rewards by using your tax refund or stimulus check to pay bills or make extra payments on loans, credit cards or mortgages. Besides avoiding late fees and saving on interest, paying down bills and debt can help you feel more secure in these uncertain times.
This is also a good time to consider refinancing your auto loan or find help managing your debt.
2. Build up your emergency savings
Now is the perfect time to build up your emergency fund. It’s a good idea to have three to six months’ worth of living expenses saved. Some experts recommend saving up to a year’s worth of expenses. This pandemic has shown us just how quickly our lives can change and why it’s important to have a cushion. A substantial emergency fund can help you weather the unexpected.
3. Save for brighter days ahead
Your dream home or vacation might be closer than it seems. Interest rates have dropped, which might put you even closer to buying your first home or your next home. If you’ve had to cancel travel plans, you likely have airline points or credits waiting for you. Your tax refund or stimulus check could help you fund even bigger and better dreams. And you’ll savor it all the more.
4. Be ready to invest
Talking about retirement and investment planning might sound scary right now. A trusted financial advisor can help you find safer places to invest for retirement, and advise you of opportunities that can be created in times like these. The financial advisors of Saxon Financial Services are available to Cinfed members for consultation and questions.
Making smart choices with your tax refund or stimulus check now can set you up for even greater success in the future. As you consider your options and manage your personal finances during this challenging time, Cinfed branch drive-thrus and nationwide network of ATMs remain open. It’s easy to stay on top of your finances, deposits and bill pay with online, mobile and text banking. Learn more about how to stay safe while managing your finances.