Scot Rumsey
January 17, 2024
• 1 Minute Read
Your tax refund is an opportunity to solidify your financial situation. Use these 5 hacks to make the most of your tax return and give your finances a boost.
1. Build Your Emergency Fund
Consider allocating a portion of your tax return to bolster your emergency fund. Financial experts recommend having three to six months' worth of living expenses saved. This fund acts as a financial safety net, providing peace of mind in case of unexpected expenses or job loss.
2. Pay Down High-Interest Debt
Use your tax return to make extra payments on high-interest credit cards or loans. This reduces debt, improving financial health and freeing up funds.
3. Build Credit with Self Financial
Use a portion of your tax return to kickstart your credit-building journey with services like Self Financial. With Self Financial, you make monthly payments into a Credit Builder Account and at the end of the term you receive the total amount paid, as a lump sum minus interest and fees. It's a super easy way to build credit and build savings.
4. Boost Your Credit Score with a Secured Credit Card
Allocate a portion of your tax return to open a secured credit card. Unlike a traditional credit card, a secured card requires a cash deposit as collateral, making it an excellent tool for building or rebuilding credit. By responsibly using the card and making on-time payments, it can demonstrate your creditworthiness and open up opportunities for better credit cards and lower interest rates.
5. Embrace an Alternative Banking Solution
Consider using part of your tax return to explore alternative banking solutions like Go2Bank or Chime. By opting for these alternatives, you can potentially save on traditional banking fees, access your funds faster, and enjoy a more streamlined banking experience. By using your tax return to make the initial deposit, you can open a new account and gain access to a dynamic banking experience.
*Credit Builder Accounts & Certificates of Deposit made/held by Lead Bank, Sunrise Banks, N.A., SouthState Bank, N.A., First Century Bank, N.A., each Member FDIC. Subject to credit approval.
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