Feb 10 2014
Tax time…it’s not everyone’s favorite time of the year, but if you have a plan for how to use your tax refund check, it may make it more enjoyable. So, we want to spark your imagination with a few smart ways to use your tax refund. Once you have your tax refund check, bring it into your local banking center to deposit it, or if you’re opting for direct deposit, set up an alert so you’ll know when it hits your account.
Pay Down Your Mortgage or Credit Cards
Our first smart idea is to use your tax refund to pay down your mortgage or credit card debt. Use this mortgage payoff calculator to see how fast you can pay off your mortgage by adding extra principal payments, or this credit card calculator to see what it would take to pay off your credit cards.
If you want to have your tax refund applied to your mortgage, you can deposit your refund into your checking account, and then you can do a funds transfer to the mortgage online. You may also make principal payments over the phone or at your local banking center. If you’d like to get a payoff quote for your Webster mortgage, or get in touch with our payoff department, give our loan department a call at 1-800-270-5400. To pay down your credit cards, you can set up an online bill payment from your checking account.
Your tax refund could add some cushion to your rainy day account. Most people recommend saving at least three months to a year’s worth of income in your emergency fund.
Check out Nerd Wallet’s post for tips on how to build your emergency fund.
Wondering where to deposit this emergency fund? You have several options, including a Certificate of Deposit or CD, or opening a separate savings or money market account, which will give you access to your money when you need it.
Start a Home Improvement Project
Want to re-do your basement or kitchen? Why not use your tax refund to offset the cost of your next home improvement project? Regardless of their size or scope, construction projects can be expensive and difficult to pay for out of savings. Fortunately, whether you are looking to remodel a bathroom, add a bedroom or build a new home, several financing options are available to you. Check out this blog post from one of our bankers on how to learn more about your options.
If vacations and holidays tend to creep up on you before you’ve starting thinking about how much money you will need, you may want to set up a separate Vacation or Holiday account. Use our savings calculator to see how much you’ll need to put away each week to reach your goal. Then check out our Holiday Club Savings account to get started online.
Increase Your College or Retirement Savings
Two of the most important savings goals for Americans are college and retirement, which makes today’s families face a daunting balancing act. Experts tell us that retirement should be your most important goal, while our parental instincts often nudge us to sacrifice our future financial needs to provide the best for our children. Is it really that black and white? See what our blogger Chris has to say in his post on the College vs. Retirement Savings Battle.
What are you planning to do with your tax refund? Please tell us in the comments, below.