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While we can’t recommend one singular way to use your income tax refund, there are better options than spending your newly acquired funds on a new bag, a faster car, or the latest gadgets.

Before you swipe your credit card, we suggest considering one of the options below to spend your refund wisely.

1. Pay off Debt

This is probably one of the most underrated ways to spend your tax refund money, but it’s often the first step you should consider when extra funds come your way. This is because debt, when left alone, only increases. So each time you avoid paying it off, you’re digging yourself into a deeper hole.

And if you’re considering putting your money into a savings account instead of paying off your debt, think again. The 1% interest that you can accrue in your savings account is NOTHING in comparison to the 18% interest you could be accumulating on your owed debt.

2. Save!

Once your debts are paid, a savings account could be another option for your tax refund. This can be a general savings account, an emergency fund account, a college-fund account, or whatever you need it to be! Whatever the case, we suggest having the IRS direct deposit this money into the savings account to avoid any temptations to spend the money in other, less fruitful ways.

3. Fund your retirement

Using your refund to invest in a retirement account is a smart way to start saving for when you’re no longer working. If you’d like assistance with retirement planning, contact us to set up your free consultation with David Alfano!

4. Start a business

If you’re still working your 9-5 while attempting to start your own business, the extra funds from your refund can be the jump start you need to make your business your full-time job. Whether you use it for marketing, web design, inventory, or employees, these funds can truly be a blessing for your new business!

If you’re still questioning how you should use your tax refund money, get in touch with us! On the other hand, if you didn’t get the refund you expected, we suggest tax planning to avoid any future surprises. Let’s set up your call with CPA and financial advisor David Alfano to give you the advice you need to pursue your financial goals!