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February 2014
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10 Smart Ways to Use Your Tax Refund
Invest in your future and save money for years to come

Getting a tax refund from the government often feels like free money, but it is actually money that you worked hard to receive. Put your tax refund to good use, such as paying off debt or investing in the future, and the money you receive will earn even more in the long run.
Pay off high-interest debt
Paying down your balances on credit cards and other debt will save you from paying large amounts of interest over time. Pay off your debts with the highest interest rates first for the most savings.
Build your emergency fund
Living paycheck to paycheck can put you at risk when emergencies arise. Keep an emergency fund in a money-market or savings account to avoid taking on high-interest debt for unexpected expenses.
Invest in a retirement savings plan
It's never too early to start saving for retirement with an IRA or other savings plan. Set up an appointment with your bank or a financial planner to learn which plan is best for you. An IRA is also useful if you switch jobs, as you can roll your 401(k) savings into your IRA when you leave.
Continue your education
Using your tax return to invest in additional career training or education programs may help you get a promotion or switch fields. Check with your employer to see if they have any tuition reimbursement programs as well.
Start a college savings plan
To save for the future, start a 529 college savings plan for each of your children. The money you save can be withdrawn tax-free for college expenses, and you may be able to get a state income tax deduction for the money you contribute.
Make home improvements
If you own your home, a tax refund can help you raise its value with some home improvement projects. Make necessary repairs or upgrade your home with a remodeled bathroom or kitchen.
Schedule a home energy audit
A professional home energy audit checks your home for problems and offers solutions for making your home more energy-efficient. These improvements can save you money for years to come.
Plan a vacation
If your savings are already in order, use your tax return to plan a vacation. Setting enough money aside for your trip will keep you from running up debt with credit cards while you travel.
Invest in real estate
Your tax return can be a good start toward saving a down payment to buy your own home. If you already own your home, you may want to use the money to pay down your mortgage principal ahead of schedule.
Start a Health Savings Account
If you have a health insurance plan with a high-deductible, you may be eligible to start a Health Savings Account (HSA). This tax-preferred savings plan lets you save money for future medical expenses.
Finding a smart way to use your tax refund is an investment in your future that may save you money for years to come.
This article is presented by Perkins Motors in Colorado Springs, Colorado


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