While the pandemic has created financial challenges for many people, it has also created opportunities for others to save money if they have been fortunate to continue working from home. Many have cut back their spending on commuting, vacations, dining out, entertainment and other things they didn’t realize were a big part of their budget. On top of this, it’s currently tax season, and some people will be receiving a refund once they file. As a reminder, the IRS pushed back the deadline to May 17 this year.

Seeing your account balances increase as you save or get a tax refund is exciting, but it’s important to make smart decisions with unexpected money. In fact, you shouldn’t consider a tax refund “extra money,” instead, it’s money that you earned all year but overpaid to the IRS. Consider a one-time tax refund as part of your regular income.

Here are some ways that you can make the most of extra cash, such as a tax refund:

  1. Create a plan

Once you find out whether you’ll be getting a tax refund and how much it will be, the most important step is to write down a plan. If you’re married, you should likely make this plan alongside your partner and make sure you agree. If you work with a financial advisor, you should be discussing your plan and any shifts fairly regularly. It can be tempting to spend all of the money on an expensive purchase you wouldn’t have otherwise made, but be strategic. Instead, consider treating yourself with part of the refund and setting another part aside, whether to strengthen your emergency savings fund or invest for retirement.

  1. Pay down some high-interest debt

As part of your plan and depending on your specific situation, consider putting some of your refund towards any debt you may have. You’ll likely want to start with the debt charging the highest interest rate. For example, credit card debt is often charged at a higher interest rate than student loans.

  1. Invest for your future

Putting a portion of your extra money towards tax-advantaged retirement savings is a great idea even if retirement feels like it’s far in the future. Anther retirement tip? If your employer offers a company match, make sure you’re taking advantage of it so you don’t leave anything on the table. Your future self will thank you.

  1. Think about education

If you have children, you can invest in their future with a tax-advantaged education account, such as a 529 plan. You might already be contributing on a recurring basis, but an extra boost never hurts.

Don’t forget – you can certainly treat yourself with a tax refund or extra money you’ve saved, but make sure treating yourself is part of a broader plan that also includes saving or investing for the future.

David Recker is a Market Director – Wealth at J.P. Morgan Wealth Management based in Carmel, Indiana. He oversees Private Client Advisors within Chase branches across Indiana. He has nearly 20 years of experience in the financial services industry and began his career as a financial advisor with UBS PaineWebber.

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