• Real Estate Professionals
  • Service Providers
First American Home Warranty
  • Request Service
  • Sign In
  • 888.875.0533
  • Get a Quote
  • Menu
Request Service Sign In

Homeowner

  • Overview
  • Why Buy a Home Warranty
  • What's Covered
  • How to Request Service
  • Home Warranty Reviews
  • Get a Quote
  • Home Appliance Warranty Coverage
  • Budget Protection
  • What is a Home Warranty?

Service Provider

  • Overview
  • Why Join Our Team
  • Home Warranty Network 101
  • Service Provider Testimonials
  • Service Provider Application

Real Estate Professional

  • Overview
  • Why Choose First American
  • Sample Coverage
  • Locate Your Area Manager
  • CRES Home Warranty
  • Real Estate Testimonials
  • Marketing Materials

Resources

  • About Us
  • Blog
  • Contact Us
  • Case Studies and Testimonials
  • Frequently Asked Questions
  • Home Maintenance Tips
Menu

Sign In / Register

  • Email Address is required.
  • Password is required.
Register Forgot Password
Request Service Sign In
  • Blog Home
  • Budget Smart
  • Home Care
  • Home Maintenance
  • Home Warranty
  • Homeowner Tips
  • Lifestyle
  • Real Estate
  • Archives
5 Smart Ways to Spend Your Tax Refund
Budget Smart

5 Smart Ways to Spend Your Tax Refund

Tax refunds present an opportunity to better your financial health. Unfortunately, many refund recipients don’t take advantage of it. “A tax refund often feels like ‘free’ money, and many people use the funds to splurge on expensive items they wouldn’t otherwise purchase,” says Mike Sullivan, chief education officer for Take Charge America, a national non-profit credit counseling agency. “However, a refund presents a unique opportunity to use the money to improve your family’s financial well-being now and in the long term.” If you receive a refund this year, consider using it in one (or all!) of the following ways:

  1. Pay Off Debt – When you receive your refund, resist the urge to spend it on a shopping spree, fancy dinner, or pricey vacation. Instead, use your refund to pay down credit card balances, student loans, auto loans, or other debt.
  2. Pay Down Your Mortgage – Direct your refund toward your mortgage principal. Even one extra payment each year can shave noticeable interest off your mortgage.
  3. Boost Your Savings – If you’re debt-free, put your money toward your emergency savings fund, retirement plan, or college savings account.
  4. Adjust Your Withholding – File a new W4 to increase your allowances and pay the appropriate amount of taxes throughout the year. Use the IRS withholding calculator and aim for the number of allowances that satisfies 100 to 110 percent of last year’s tax payment.
  5. Use Direct Deposit – Set up an automatic deposit to direct the money you would have spent on excess taxes into an interest-bearing savings account. You won’t notice the difference in your paycheck— it’s money that would have been withheld for taxes—but your contributions will quickly add up.

“While it’s fun to receive a windfall of cash, it’s important for consumers to understand the IRS isn’t giving away money—they’re returning money they borrowed, interest-free, all year long,” adds Sullivan. “It’s a good idea to adjust your withholdings to break even and make your money work for you—not just the government—throughout the year.”

This article is about...
  • Taxes
  • Mortgage
  • First-time homeowners
  • Checklists

Popular Articles

water heater temperature
What's the Best Temperature for Your Water Heater?
Finding a home's shutoffs
Where to Find Your Home's Shutoff Valves
Ceiling fan direction
Which Way Should Your Ceiling Fan Turn?
When to change water filter
How Often Should You Change Water Filters?
Home warranty repair
What is a Home Warranty?
Change dishwasher filter
Does Your Dishwasher Have a Filter?
garbage disposal tips
What Can Safely Go in the Garbage Disposal?
Grout cleaning guidance
Guide to Care, Cleaning, and Maintenance of Grout
Changing air filter
How to Change the Air Filter in Your HVAC System
Converting your garage
Garage Conversion Ideas

This website uses cookies and similar technologies to manage your sessions, manage content, and improve your website experience. To learn more about these technologies, your options, and about other categories of personal information we collect through this website and how we may use it, please see our privacy policy. This notice is effective for your use of this website for the next 14 days.

  • Home
  • Blog
  • Contact
  • Accessibility
  • Terms of Use
  • Privacy
  • Sitemap
© 2023 First American Home Warranty Corporation and its licensed subsidiaries. All rights reserved.