You Got Your Tax Refund, Now What?

Friday, May 04, 2007
By Abbey Khan
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You finally received your tax refund from Uncle Sam – so do you splurge or save? If you choose to splurge, then what are you waiting for! If you want to make this newfound wealth work for you, read on.

We asked leading financial experts what we should do with our refund checks, and here are the top 5 tips we heard over and over again:

Pay down debt on your credit cards. Have more than one? Use the money on the card with the highest interest rate.

Put the money in your IRA. If you don’t have one, get one! You may be a long way from retiring, but the sooner you start, the better.

Save for an emergency. Life happens, be prepared. The general rule of thumb is to have at least 6 months of living expenses. If this isn’t the case, your refund is the perfect safety cushion.

Buy insurance for your home or apartment, medical, dental, or auto if you’re not properly covered.

Put the money towards your home. Send one extra mortgage payment to your bank and you’ll decrease the life of the loan and save on interest. Or use the money to make repairs on your house before they get worse and end up costing you more later.


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