How to spend your tax refund

Instead of spending your tax refund this year on something that may not last beyond today, why not consider putting it toward something that will help make your financial future grow?

  • Reduce your debt. Make an extra credit card, car or house payment to reduce your interest costs.
  • Consider buying a U.S. Series I Savings Bond. You can purchase these bonds from most banks, credit unions, or online by visiting www.savingsbonds.gov.
  • Automatic payroll deduction. Set up an automatic withdrawal that goes directly to some type of savings account. You can set it up with a bank or mutual fund company, and start the account with your tax refund.
  • Emergency fund. For those who do not already have an emergency fund, now is the time to start one. Ideally, people should have 4-6 months of income put away for an emergency. However, start small with a $1,000 in savings. Starting or increasing an emergency fund can reduce stress even if no emergency occurs, or it can be used to prevent a personal crisis if one does occur.
  • Invest in yourself. In this competitive job market it is recommended that people complete courses or certifications that can help boost their current career or provide more options to pursue a new one.
  • Open an Individual Retirement Account. For those who do not have any debt, starting or increasing an IRA account could lead to tax benefits, plus an easier retirement
  • Splurge. After being responsible and paying off debt, creating a financial plan, and investing in retirement, individuals should do something such as taking the kids to a movie or buying something nice for a spouse or yourself.

Taxpayers can get free help with budgeting and tax preparation by contacting ROCS at (605) 487-7634. ROCS is an Equal Opportunity Organization.

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