Money savvy families put tax refunds to work
Despite the dread that visits annually during tax season, many Oklahomans often anticipate receiving a refund.
While it is fun to dream and plan how to spend the windfall, do not forget to put some thought in ways those dollars can help create a brighter future for financially savvy families.
“Of course, it’s OK to use part of your refund on something fun, but this is a great opportunity to look at ways to help you and family advance your financial goals,” said Cindy Clampet, Oklahoma State University Cooperative Extension assistant state specialist, family resource management.
Whatever the size of the refund check, here are three solid ways to make those funds work in the longer term.
Pay off high-interest debt. It can be hard to make meaningful headway on credit card and loan balances when only covering the minimum payment.
“In many cases, paying the minimum each month means most of that money is eaten up by interest,” Clampet said. “Use your tax refund to pay a lump sum against the entire balance.”
Create or add to your emergency fund. In the event of an unexpected bill or loss of income, an emergency fund can help soften the blow to the family’s budget.
Families should work toward building up enough savings to cover their living expenses for 3 to 6 months.
Establish or advance other financial goals. Achieving long-range savings goals like building a retirement fund or buying a home takes discipline to consistently set money aside. Even modest amounts add up quickly.
For more information on personal money management strategies, contact the nearest county Extension office.