What Can You Do With Your Tax Refund? Part II

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We’re getting close to the tax-filing deadline. For many of us, this means it’s that time of year when we get our biggest financial windfall – a tax refund. If you have recently received a refund, or are expecting to get one in the next few weeks, what should you do with it?

Of course, you could just spend the money on something you want, but if you’d like to maximize the financial benefits from your refund, you might want to consider other options, including the following:

Contribute to a college fund. It’s never too soon to begin saving for college, which has grown increasingly expensive over the last several years. So, if you have young children, you may want to think about investing some or all of your refund into a college-savings account, such as a tax-advantaged 529 plan.

Pay off debts. You might be able to use your refund to pay down some debts – or perhaps even pay off some of your smaller ones. The lower your monthly debt load, the more money you will have available to invest for the future. Keep in mind, though, that you might not want to look at all debts in the same way. For example, putting extra money toward your mortgage might help you pay it off faster, but you’ll also be funding an asset – namely, your house – that might not provide you with the same liquidity as you can get from investments such as stocks and bonds.

Help build an emergency fund. By building an emergency fund containing six to 12 months’ worth of living expenses, you can help yourself avoid dipping into your long-term investments to pay for large, unplanned-for bills, such as a major car repair or an expensive dental procedure. Your tax refund could help build such a fund, with the money ideally being placed in low-risk, liquid vehicles.

Clearly, you can help yourself make progress toward a number of your financial goals with your tax refund – so put it to good use.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

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Dylan Hales
I'm a native North Carolinian, who grew up in the eastern part of the state. My folks exhibited and instilled many of the values that I still hold close to today. I had the opportunity to earn a bachelors from NC State, which is where I met my wife. We married shortly after she graduated in 2016. She grew up in this area, so we moved back to the Wesley Chapel area so we could be close to her family. Folks here have been more than welcoming and have made it feel just like home (minus the eastern NC BBQ).

People often ask what I like to do when I'm not at the office. That mostly depends on what time of year it is. During the spring and summer I like to work on my garden. During the fall and winter I love keeping up with NC State football and basketball. We also have two rescue dogs who like to explore the state with us.

Since I've been in Wesley Chapel, I've noticed that most folks just like me. We're all from somewhere and we've all come here following the things we love. I want to understand what those things are for you, and help get you there.