It can be tempting to use your tax return on something fun like a vacation or shopping spree, but the money you get back from the government can be used to improve your financial situation. In this blog, we detail five ways to use your tax refund to get yourself in better financial shape.
Starting or Adding to an Emergency Fund
While putting your tax return into savings may sound like a drag, you will thank yourself down the road. Creating a savings account specifically for emergency situations can help when life starts throwing you lemons like a job loss, illness or accident. Putting some or all your tax return into an account like this will allow you to have the funds available when you need them. Ideally, you should work up to having enough savings in reserve to cover six months of living expenses if you are unable to work.
Paying Down Credit Card Debt or Other Loans
Carrying a balance on a credit card adds up quickly and affects your credit score long-term. If you have a balance on your card, use your tax return to pay it off or pay it down. This can be applied to other credit as well such as auto or student loans, potentially saving you a few payments at the end of the loan.
Add or Create a Retirement Account
Use the money to open or add to your retirement account. There are many options available to suit any budget or lifestyle. The Capstone Planning Group* can create a personalized plan made specifically for you and your family.
Seed the College Fund
Whether you are starting or adding to a college fund, saving for your child’s future is a great use of your refund. Some 529 plans also allow for a deduction on your state income taxes, helping make your refund even bigger the next year.
Kickstart Your Business
Whether you want to expand your business or start a new one, your refund can be the perfect seed money. While that may not be enough to fund everything you need, we can help with various lines of commercial lending.
*Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Cornerstone Bank and The Capstone Planning Group are not registered as broker/dealers or investment advisors. Registered Representatives of LPL offer products and services using the name The Capstone Planning Group, and may also be employees of Cornerstone Bank. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of Cornerstone Bank or The Capstone Planning Group. Securities and insurance offered through LPL or its affiliates are:
|Not Insured by FDIC or any other Government Agency||Not Bank Guaranteed||Not Bank Deposits or Obligations||May Lose Value|