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Money Minute
Quick Tips
Getting a Tax Return?
Money Minute
Here are a few ideas to ensure your money is working for you.
 

As we start the tax season, some of us may be fortunate enough to get a tax return. Now before you dream of how to spend your windfall, here are a few ideas to ensure your money is working for you.

If you don't have an emergency fund yet, your tax return can be a great way to start one. Building up your emergency fund will give you options in case you lose your job, or need to make unexpected repairs to your home or car. In short, you have a financial cushion to deal with whatever surprises may come your way.

Consider using your tax refund to pay down your debt. If your credit card charges a 15% interest rate, but your savings account only earns you 1% in interest, it makes sense to pay off that credit card.

If you have an emergency fund and your debt is under control, then a tax return can be a great way to boost your retirement savings. Most Americans have not saved enough for their retirement. Consider adding to a retirement account, such as a Roth or Traditional IRA.

Although it can be tempting to spend your tax return on something more exciting, we also have to remember that financial windfalls don't come every day. As such, it's important to take a moment and be thoughtful about how to maximize your good fortune.




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