Stretch Your Dollar: Best ways to spend your tax refund

Stretch Your Dollar

If you’re an early tax filer, you may have started getting your refunds back if you’re so lucky to get one!

Before you run out and splurge, we are stretching your dollar with the five best ways to spend that extra cash.  

Don’t splurge, be smart! That’s the advice from financial experts about how to spend your tax refund check from Uncle Sam.

One, start an emergency fund. The CEO of SmartPath Financial says you should be prepared for unexpected expenses.

“Ultimately you’re trying to get to 3 to 6 months of an emergency fund. I’d start with one month,” said Alok Deshpande, CEO of SmartPath Financial. “Maybe it’s $2,000 you’re setting that in a savings account.”

Two, pay off your debt. Whatever you owe money on, work hard to get rid of it and avoid paying double-digit interest rates.

“You’re going to take the highest interest rate first and work that piece of debt off first. and that’s gonna help you save some money,” said Deshpande. 

Three, upgrade your house. It’s likely your most valuable asset, so pour money into projects that will raise equity.

“The kitchen and bathrooms is where to put the money in terms of homes,” said Deshpande. 

Four, put the money toward your individual retirement account. If you don’t have one then don’t put it off.

“Whether that’s ROTH or traditional don’t get too caught up there. Just get it started. If you start investing sooner, you get the opportunity for your money to compound,” said Deshpande. 

And number five, have fun. Afterall, fun is in the word refund.

“So let’s say you’ve paid off a credit card, or student loans, whatever your next goal is, that 20% is there for you to spend as a reward for finishing that goal,” said Deshpande.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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