What Should You Do With Your Tax Refund?

If you overpaid your taxes last year, you might get a tax refund. Unless you need the money to cover essential spending right now, here are some ways you can make this windfall work for you:

• Pay down your credit card debt. Even if your tax refund doesn’t cover the whole amount, paying off even a portion of credit card debt will help you reduce your monthly repayments and improve your credit utilization ratio.
• Use your tax refund to open a savings account and start an emergency savings fund. You can use this money for unexpected bills, e.g., urgent repairs or medical expenses.
• Open a traditional IRA or ROTH IRA. Use the money to save towards your retirement.
• Invest the money. This could be an opportunity to grow your wealth.
• Invest in your future. Use the money to pay for additional training, which could open new career opportunities.

Seek financial advice if you’re unsure how to use your tax refund.