April 7, 2014 | 446 views
Smart ways to use your tax refund
The deadline for filing personal taxes is fast approaching and the good news is that many of you have likely already filed and are now just waiting on your refunds. Still, your finance work isn’t done at filing – it’s now time to think about what to do with that refund. With just a little bit of planning and forethought, you can advance your financial goals, while still having a little fun. Some suggestions to consider include:
Boost your savings funds. According to Bankrate.com’s June 2013 Financial Security Index survey, more than a quarter of Americans do not have an emergency fund – don’t be one of them. If you don’t already have six to eight months of living expenses saved, this is a good chance to add some cushioning. You can help to protect yourself against an unexpected job loss or medical emergency just by depositing a portion of your tax return into a liquid savings or money market. If you are among those who stashed away adequate funds in your emergency savings, then you may want to consider saving for life's bigger expenses, like your child's college tuition or home improvements that can increase the value of your home.
Pay off high-interest rate credit card debt. By paying down a portion of such debt, you can help your overall financial position for the remainder of the year and work on improving your credit.
Invest in your retirement. The maximum contribution for traditional or Roth IRAs in 2014 is $5,500, or $6,500 if you’re 50 or older. While you have until next April 15, you can go ahead and contribute today and could receive a tax deduction, depending on your IRA, when you file your taxes next year.
Mayra DiRico is senior vice president/director of retail banking at Astoria Federal Savings.