Do more with your tax return | Business

According to the IRS, the average tax refund for returns received in 2022 so far is $3,473. That’s up from the 2021 average of $3,021 on the same date.

If you’re one of those who recently received a tax refund or expect to receive one soon, now is a great time to think about how you can get the most out of those extra funds.

Just like improving our physical health, good financial health starts with building a solid foundation.

Here are some questions to ask to help you make the best use of your tax refund:

Do I have to catch up on payments?

Before you start dreaming up new ways to spend your new funds, make sure you’re up to date on all your current payments. Staying on top of things like your rent, mortgage, utilities, and other bills is an important way to bolster your financial health and can help improve your credit history, which could lead to more affordable loan rates at the future.

Are there any debts that I can prepay?

If you have a high-interest loan, like a payday advance or a high-interest credit card, you might want to consider paying it off or making an extra payment to help you get out of your debt. debts more quickly, to pay less interest overall and for free. more money in your monthly budget in the future.

How much have I saved for an emergency?

Opening a savings account might not be the most exciting way to grow your tax refund, but it could be a big step towards a better financial future. According to a January 2022 poll by Bankrate, 56% of Americans don’t have savings to cover a $1,000 bill. Preparing for the unexpected now, when you have extra money, could help you overcome these obstacles. Plus, some credit unions and local banks offer special rates on certificates and other savings products each spring to help you earn more on your savings.

What are my longer-term financial goals and dreams?

If you already have enough emergency savings, you might want to consider your longer-term financial dreams. Maybe you’re already dreaming of what you’ll do in retirement, or your next goal is to save for a down payment on a new home or create an education fund for yourself or your children. Whatever your long-term goals, the sooner you start saving, the better.

And remember, help is available. Start by visiting a local financial institution to talk to a professional about your goals. Many credit unions and banks will be happy to discuss your financial situation one-on-one and offer helpful advice. A trusted financial institution is also the best place to open a savings account.

Jake Darabos is Director of Finance and Administration for Abound Credit Union.

Jake Darabos is Director of Finance and Administration for Abound Credit Union.

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