Daily Dupaco

Thursday, March 19, 2015

What will you do with your refund from Uncle Sam?

A growing number of Americans are taking a more cautious approach with their tax refunds this year, choosing to save – rather than spend – their money from Uncle Sam.

According to the National Retail Federation’s annual Tax Returns Survey, 47 percent of those expecting a refund plan to put the money into savings, the highest percentage in the survey’s history.

Dupaco Community Credit Union’s Andrew Houy isn’t surprised that more taxpayers are making saving a priority.

“With rising costs of items like food and gas, I think that people are realizing the importance of saving in the event of an emergency,” said Houy, lending consultant/operations assistant at the Key West, Iowa, branch. “There’s some comfort that comes from having a nest egg.”

When receiving a tax refund, it’s important to think “big picture” instead of satisfying a short-term need, Houy said. While everyone’s financial situation is unique, here are three “big picture” ways to use that refund wisely:

  1. Pay down high-interest debt. Paying down debts, especially those that carry high-interest rates, can alleviate monthly payments and ease long-term payback concerns, Houy said. 
  2. Use it for necessary expenses. Putting the refund toward a bigger, necessary expense, such as auto insurance, also can bring budget relief. 
  3. Create a nest egg. “Establishing a nest egg with long-term intentions is critical,” Houy said. 

Not sure how to best use your refund? A free Dupaco Money Makeover can help you compare how much your refund would save you in loan interest to how much it would boost your savings.


By Emily Kittle

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