Taking Full Advantage of Your Tax Return

April 20, 2023

The average tax refund takes roughly three weeks to arrive, which gives those who filed at the tax deadline only a few short weeks to decide exactly how to use it. Though refund amounts vary from taxpayer to taxpayer, in 2022 the average refund was just over $3,000, which can go along way if spent wisely.

If you are expecting a refund this year and looking for ways to maximize it to reach your financial goals instead of splurging on something on your wish list, the experts at BayFirst suggest considering:

• Contributing to your emergency fund. You will never regret being more prepared for the unexpected.
• Opening or contributing more to a high-interest savings account, like BayLive. When rates are good, you should take full advantage – especially if you have extra funds.
• Putting it toward your student loans. Making a larger-than-normal payment can put you closer to life without student debt. Just be sure you inquire about any pre-payment penalties first.
• Planning for your retirement. Consider adding to your retirement fund or jumpstarting your retirement fund.
• Saving for your child’s college fund. It’s never too early to set up a tax advantage college savings plan, like a 529 fund, for a loved one.
• Paying down your credit card debt. It’s likely that your return won’t cover all that you owe, but it’s smart to make a dent with what you can.
• Renovating your home. Adding value to your home is always a smart idea. As is making improvements that will also save you money in the long run, like putting in energy efficient appliances.
• Saving for a home. The more you save up for a down payment, the lower your monthly payments will be when you’re ready to buy.
• Donating to charity. If you can, consider helping others who need it..

 
As you await your tax return, now is the time to weigh all your options and plan for how to best spend or save it. For more personalized financial advice or to learn more about ways banking with BayFirst can help you maximize your return, give us a call at 833.698.2265, stop by your closest banking center or fill out the form below.