Springboard Offers Five Tips on How Americans Should Spend Their Tax Refund
April 15, 2008, 3:24 pm
As tax time draws close, Springboard reminds taxpayers that a refund isn't "found money" and that it should be put to good use.
April 15 is less than a week away and taxpayers across the country will be burning the midnight oil in order to file their returns on time. In the coming weeks, Americans will be peering into their mailboxes to look for their tax refund. According to the Internal Revenue Service, more than 90 million Americans received one last year.
For many each year, tax refunds represent a down payment on a new flat screen television or perhaps a trendy new pair of shoes. Springboard, a non-profit consumer credit management organization, wants consumers to stop and think before spending that refund.
Springboard has compiled five easy tips on how consumers should utilize their tax refund checks. These tips include:
- Repaying outstanding debt - Use your refund to pay down car loans, credit cards or any outstanding bills. Use this "found money" to help your checkbook and relieve your pounding head.
- Establishing or contributing to a rainy day fund - Nothing in the world is predictable and that includes the security of you or your spouse's job. Establishing an emergency savings fund is a must. Contribute your refunds to this fund, and remember, you should have enough saved to cover three to six months of living expenses.
- Starting a college fund for your kids - It is never too early to start socking away money for college. If possible, start an annual tradition and contribute your refunds to your children's college fund. Before you know it, you will have a sizeable amount of money to contribute to their higher education.
- Putting the money toward a family vacation - Ok, we know this can be seen as frivolous, but there is nothing more important than investing in family time. Whether it is a day trip to the mountains or a weekend trip to Disneyland, use your refund instead of your credit card to do something fun with your family.
- Investing in the future -- If you don't have debt, invest in an IRA, mutual fund or stocks. The money will increase over the years and you could end up making a sizeable investment for your future.
