By: Whitney Morrow
Carter County Extension Agent
Source: Kelly May, senior extension associate for family finance and resource management
It’s that time of year when we get excited about our tax refunds. By responsibly using this one-time infusion of cash, you can improve your financial standing.
You could wisely use your tax refund to add to your emergency savings account. Most of us do not have enough money saved in the event of job loss, illness or another unexpected event that prevents us from working. Most financial experts recommend having at least six months of income saved to help you work through financial hardship. This fund can also help cover unexpected or emergency household repairs.
You could also choose to reduce your debt with your tax refund. Paying off high-interest debt as quickly as possible is a financial win-win because it reduces the principal on your loan and lowers future interest payments.
Make an extra mortgage payment toward the principal. Much of a mortgage loan goes toward interest and not the principal itself.
Investing in your family’s future is always a wise move as it will continue to guarantee future financial stability. You could use your return to start or add a college savings fund for your children or to start or add to your retirement account.
If you must spend your tax refund, make wise spending choices. Consider purchases that allow you to make improvements that add to the resale value of your vehicle or home or to make home improvements that lower energy costs.
You never get too old to learn a new skill. Use some of the refund to take classes or learn new skills or hobbies.
More information on family financial education is available by contacting the Carter County Extension office.
Educational programs of the Cooperative Extension Service serve all people regardless of economic or social status and will not discriminate on the basis of race, color, ethnic origin, national origin, creed, religion, political belief, sex, sexual orientation, gender identity, gender expressions, pregnancy, marital status, genetic information, age, veteran status, or physical or mental disability.