Buzz
A tax refund isn't a bonus; it usually reflects that you overpaid in taxes. Remember that this refund is income you could have used for your financial priorities, which can help you avoid squandering it. Here's what we mean by that.
The top priority: reduce credit card debt. Applying your tax refund to high-interest debt maximizes your return. For instance, paying off debt with an 18% interest rate means you're essentially gaining 18% on your refund.
Once your debt is reduced, consider using your refund to build up your emergency savings, contribute to a Roth IRA, or start investing if you haven't already begun.
GOBankingRates has compiled a useful list of 7 ways to allocate your tax refund according to your financial goals and circumstances—timely reminders before your refund arrives.
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