The average refund in 2017 was $2,763. If you or your family are one those who will be receiving a refund from the IRS, here are three ways to spend your refund to put a boost in your financial picture.
1.) Payoff your debt.
The biggest drag to people's bottom line is high-interest accruing debt. One sure way to improve your financial picture is to use your tax refund to pay down Credit Card debt or personal loans. By paying off high interest debt you are guaranteeing yourself a return on your money in the amount you will be saving in interest payments.
2.) Build up your Emergency Fund
Building up your emergency fund not only brings you peace of mind but also helps you achieve financial freedom to know you can cover the unexpected expenses. You should aim to have at least 3-6 months of essential expenses saved up for your emergency fund. Putting your refund away in a savings account will give you a great head start.
3.) Invest in a high yield savings account or the Stock Market
Invest your refund and watch it grow. Investing is one of the best ways to set yourself up for the future and have your money work for you. For example if you were to invest the average refund from 2017 of $2763 and earn a 6% return on that money you would have $3,697.49 after 5 years. Let the power of compounding interest and earnings work for you.
Matthew Stutes, CFP®
Cornerstone Wealth Management
486 NW 2nd Ave.
Canby, OR 97013