Better’s Best: What to Do with Your Tax Refund or Stimulus Windfall.

Are you expecting money back from the IRS through a  tax refund, recovery rebate credit or the coming stimulus payment?  If yes, now is the time to plan how you will use this money. 

If this year has been financially tough…Use it to Protect Yourself.  As a financial counselor, one of my first questions to a client is, “Do you have an emergency fund?” Your emergency fund is your financial seatbelt.  Just like your vehicle’s seat belt, you should have it on at all times.  You may rarely need it, but when you do, there’s no time to put it on, which is why you need to fund your emergency fund before the crisis happens. One last comparison, the emergency fund will prevent the most serious injuries to your finances. In a time of need, whether it is an unexpected dental procedure, vet bill, or the loss of hours at work, your emergency fund will help you stay out of high cost debt and allow you to pay key bills.  Marjorie McLean, MBA, AFC®: 

More advice for tough times:  Bad Moon Rising.  What to do in times of financial crisis. – Better Financial Counseling Network

If this stimulus is a Bonus for your finances, and you’ve already established an emergency fund, focus on your next priority financial goals: such as paying down your consumer debt, funding for your employer sponsored retirement plan or personal IRA or using it for a needed repair or major purchase.

If you find yourself financially on track and your refund is “extra”…Enjoy a Professional Photo Shoot.  If you’re financially positioned to splurge with your tax refund, use a portion to capture memories.  Find a local photographer that seems like a good fit for your photo session backdrop (beach, in the front yard, at a local landmark, etc.) and prepare to capture these moments in time. Spending a portion of your tax refund on an experience that is pandemic approved (in most states), will last a lifetime. As a final note, you may consider turning this into a family tradition where every year you schedule family photos after receiving your tax refund. Shari D. Evans, EML, AFC ®

Have questions?  Want some help?  Each Better, Personal Financial Counselor, is available to meet with you virtually to create a plan to meet your financial goals.  Whether your goal is to pay off debt, save for a new home or just get more control over your day to day financial life, we’re here for you.  Contact and Meet Us

 

Read more of Better’s Best Money Advice

 

Photo by Alexander Mils on Unsplash

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