Three Ways to Get A Return on Your Tax Return

Every tax season, the anticipation of receiving a tax return brings both relief and opportunity. Rather than viewing it as an unexpected bonus to be spent on things you want now, consider a strategic approach to maximize the impact of your tax refund. In this guide, we provide three tips to achieve a bigger financial return from your return this tax season.

Stock Your Emergency Fund

One of the 8 Essential Financial Tips that everyone should practice is to establish an emergency fund. If you don't have a full 3-month living expenses cushion, allocate your tax refund to establish or build your emergency fund. This can help shield you from unforeseen challenges like job loss or unexpected medical expenses, while contributing to your long-term financial stability.

Make a Dent in Your Debt

Offset the burden of high-interest credit cards with your tax refund. Prioritize paying off the highest-interest credit card first, exceeding the monthly minimum payment to accelerate your debt reduction. You can also explore debt consolidation options with our bankers to devise a comprehensive strategy for becoming debt-free.

One Extra Mortgage Payment

Did you know that just one additional mortgage payment per year can save you thousands of dollars and possibly years over the life of your home loan? This seemingly small action can yield substantial savings. Utilize our mortgage calculator to estimate the impact of extra payments on your mortgage. Make sure to check with your lender to confirm there are no stipulations about extra payments or prepayment penalties.

Remember, your tax return is money that belongs to you. Getting a refund is essentially getting back what you’ve loaned to the government at 0% interest, so when you receive it make strategic decisions that align with your long-term goals to help build your financial foundation. If you would like to speak to someone about your individual tax or financial situation, contact us and we will be happy to help.