Financial Friday: Smart ways to spend & save your tax refund

WAFF's Haley Baker reporting
Published: Apr. 1, 2022 at 1:16 PM CDT
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HUNTSVILLE, Ala. (WAFF) - For many people, their tax refund is the largest lump sum cash they get in a year. According to the IRS, the average tax refund so far this year is $2,306. That cash presents an excellent opportunity to improve your finances.

WAFF spoke to Briana Cousins, a Financial Education Coordinator at Redstone Federal Credit Union and she offered this advice.

  • Pay Down Debt: With interest rates expected to rise, you want to eliminate as much debt as possible, especially high-interest compounding debt.
  • Build or Boost Your Emergency Fund: An emergency fund is an important piece of your financial foundation. Having an emergency fund can help you in the event of a job loss, salary reduction, or unexpected financial emergency.
  • Add to Your Retirement Fund: It’s always a good thing to invest in your future, regardless of your age or your career stage. A simple way to start is by investing enough in your workplace retirement plan to earn your employer’s full match.
  • Start a College Fund: If you have children or grandchildren you want to attend college without stressing over money, start now. Investing in a 529 plan or opening a high-yield savings account are two options.
  • Student Loan Repayments: Student loan payments restart in May. Your refund can help provide a jump start as you become accustomed to those monthly payments again.

For more ways to save, be sure to tune in at noon every Friday for WAFF 48′s “Financial Friday” segment.

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