Maximize Your Tax Refund by Paying Down Debt
A tax refund can feel like a gift from the money gods. The minute your award amount is finalized, you start pondering the possibilities. There’s that long-awaited vacation in the back of your mind, as well as those indulgent one-time purchases you’ve been dreaming about. After all, this is hard-earned cash restored to your bank account, right? Why shouldn’t you have a little fun with it?
Special purchases are indeed an important reward in life, but there’s a better way of spending your tax refund. When you use it to pay down debt, you can make a big impact on your monthly budget and your long-term financial health. It’s your ticket to building financial freedom. Think of it as a way to ultimately have your cake and eat it, too.
“We have a lot of customers who come in seeking guidance on what to do with their tax refunds,” says Bank of St. Francisville Lobby Manager Becky Wright.
“The great thing about a community bank is that we can usually give them the help they need the minute they walk through the door.”
For example, BSF loan officers are always on hand to help guide customers who want to pay down, or pay off, a personal loan. “Even if your loan officer is not here at the time, other loan officers are happy to help you,” Becky says.
For many customers, it makes the most sense to pay down high interest credit card debt. Paying down, or off, credit card debt is a practical way of saving money, since the average credit card interest rate is 19.02%. Eliminating the need to pay nearly 20% extra on your monthly balance can yield immediate cash in your pocket for saving, or responsibly spending.
Lucky enough to have your debt under control and prefer to use your tax refund to add to your investment strategy? BSF partners with investment experts, Joe and Pam Malara, representatives of Cetera Investment Services. The Malara's keep regular office hours at the bank and provide support to clients who see investing as a way to fulfill their financial goals. Click here to learn more about Cetera’s representatives.
Another option for your tax refund is to use it to start or add to your children’s college funds. If you haven’t started a college fund already, says Becky, look into the State of Louisiana’s highly regarded START savings program, an Education Savings Account (ESA) that provides a match for certain income levels. In addition, account owners receive state tax deductions for deposits up to a certain amount.
If a customer isn’t sure how to use his or her tax refund, Becky advises taking advantage of the bank’s favorable CD rates. “We have a 13-month CD that can serve as a great place to park your refund while you decide what to do with it,” she says. “It’s much better than simply depositing it into your checking account, where it’s likelier to get spent. This way, you can’t touch it for 13 months.”
Using your refund to pay down debt or invest in a savings vehicle is a great way to improve your long-term financial position. You’ll give yourself more latitude each month, and you’ll take important steps in building financial freedom.
To learn more about how you can use your tax refund this year, or to make an appointment with Becky, call 225-635-6397 or click here.
Click here for more information about how BSF can help you achieve your personal investment goals.