Saving with 6abc: Making most of tax refund

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April 15, 2014 2:13:45 PM PDT
We are Saving with 6abc on this Tax Day.

Assuming that you've already filed, it's time to focus on making the most of your return.

According to the American Bankers Association, there are 5 ways to make that extra money work harder for you.

First up, save for emergencies.

With 40 percent of American families living paycheck to paycheck, that lump sum can be a perfect opportunity to start or emergency fund.

Opening or adding to a high-yield savings account can make a huge difference.

Next up, pay off debt.

Use the refund to take care of existing balances or chip away at loans with the highest interest rates.

If those tips don't apply to you, why not save for retirement?

Using a portion of your refund to open or increase contributions to a tax-deferred savings plan like a 401k or an IRA can really pay off in the long run.

Next, invest in your home.

Consider upgrades that will increase the value of your home.

For example, using your refund to buy energy-efficient appliances can save you hundreds of dollars a year, plus some of the cost can be written off.

And finally, Donate to charity.

If you can afford to share a portion of your refund, now is the time.

Any contribution you make is tax deductible, so you'll actually save money on next year's taxes.

LINKS:

http://www.businessinsider.com/sc/how-to-spend-your-tax-refund-2014-4

http://www.prnewswire.com/news-releases/spend-or-save-five-ways-to-make-the-most-of-your-tax-refund-255176221.html

http://www.aba.com/Consumers/Pages/default.aspx


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