From dining out to shopping the sales and those summer vacations, people are programmed to spend the money coming in.
Since humans aren’t exactly wired to save and those tax returns are likely coming in now, personal finance expert Jean Chatzky told us to think carefully about how you spend it or better yet, don’t spend it.
“We want to look at where we’ll get the most return on our money. It may mean paying down high-interest rate debt, it may mean putting money into a retirement account that is matched by our employer or it might mean putting it into a high-interest rate savings account and letting it form the foundation for the emergency cushion that we just don’t have,” said Chatzky.
Finding ways to boost your savings account’s interest rate is also a winning strategy.
“On average they’re paying point one percent interest which is basically nothing but there are higher interest rate savings accounts out there if you’re willing to take the time to look for them,” said Chatzky.
She notes Barclays has one that’s 2.2% right now.
Tip three – decide if you like the big refund check or if you’d like more coming in each paycheck. Tweak your witholdings to match the savings scenario for you.
And keep in mind the basics. Track your spending each money so you know where you’re money is going.