Wondering how to spend that tax refund this year? An NBC News affiliate recently sat down with Wells Fargo Financial Planner, Sara Halpin, who gives us some good ideas on how we can spend our returns wisely and still have a little fun. Here are a few of her tips:
Treat Yourself - If you are tempted to blow your tax return on a new pair of shoes then go ahead, take 10 percent of your check to spend on something fun and just for you.
Pay Down Credit Card Debt - Hopefully that 10 percent satisfies your temptations to spend and you are now free to spend the remaining 90 percent wisely. The first thing you should consider is your debt. Credit cards can carry very high interest rates, so pay off the debt with the highest interest first.
Build Or Rebuild An Emergency Fund - If credit card debt is not a problem, you may want to think about building an emergency fund. It’s recommended that you have at least 5 months of living expenses saved up in case of an unforeseen job loss.
Make An Extra Payment Or Two - It can also be a good idea to spend that refund on an extra mortgage or car payment. This way, you can pay off the house or car sooner and get rid of those monthly payments so you can spend your money on what you want.
Think About Your Retirement - Another wise move would be to use your tax refund to boost your retirement savings. It may not seem like a pressing matter now, but in the long-run you will be very happy you did this.
Are you expecting a refund this year?
How do you plan on spending it?