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Mar152017

Ways to Spend your Tax Return

It's Tax Time! Do you know how you are going to spend your tax return this year? As tempting as booking a vacation may be, we know that a strong financial future doesn't build itself! Here are some alternative ways to spend your tax return that will benefit you.

1. Pay off Loans and Credit Cards

Outstanding loan and credit card balances affect your credit score. If you want better interest rates to save yourself money in the long run, keep that credit score high. If you have multiple loans and credit cards, we recommend throwing your tax return at the one with the highest interest rate first.

2. Retirement

Saving for Retirement is extremely important in your long-term saving plan. Without adequate retirement funds, people nearing retirement will struggle when trying to meet their financial needs. When it comes to saving for retirement, the earlier you start, the better! Consider investing your tax returns, or at least a portion, into jump starting your retirement. 

3. Save for Emergencies

It is recommended to save at least six months of living expenses in case of emergencies and unexpected costs like job loss, divorce, or health issues. If you live paycheck to paycheck and find it hard to start saving, our Build it! Certificate allows members to open a 12-month Share Certificate (or CD) for just $25—(regularly $500). This certificate has a higher interest rate than our normal 12-month certificate so dreams can be built faster; savings can grow higher. After direct deposit is established, you can open a Build it! Certificate. The money will be deposited into the certificate with each direct deposit. To create a healthy savings plan, a minimum of $40 a month must be deposited. Little by little, the Build it! Certificate adds up to big savings. The members can add money at any time; there is no need to wait for direct deposit to come in and there is no maximum a member can deposit. Contact us today to get started!

4. Needs vs. Wants

We get it. Minnesota winters are long, cold and harsh and that tax return gets deposited into your account when spring fever is in full force. As tempting as it may be to book your spring break trip, consider using that money to invest in things that will give you a better return on your investment like making home improvements or additional payments on your mortgage. If you swap out 20 of your standard lightbulbs for LED lighbulbs, you can save almost $200/year if you use them an average of 6 hours per day. Making additional payments may save you money by decreasing the total amount of mortgageinterest you pay over the life of your home loan.

 

Before you book your next vacation or buy the newest iPhone, consider letting your tax return work for you. It's one step close in Building a Strong Financial Future!

 

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