Did You Get a Tax Refund?

Looking ahead to tax day on April 15th, the New Hampshire Bankers Association (NHBA) offers advice to consumers on how they can maximize their refunds.

“Nearly 80 percent of U.S. tax filers will receive a refund this year,” said Christiana Thornton, President/CEO of the NHBA. “Having a plan for the smart use of your refund can make a big difference in an individual’s financial security.”

As millions of Americans await reimbursement from the government, the NHBA has highlighted five basic tips for making the most of tax refunds.

• Save for emergencies. Open or add to a high-yield savings account that serves as an “emergency fund.” Ideally, it should hold up to three-to-six months of living expenses in case of sudden financial hardships, like losing your job or having to replace your car.

• Pay off debt. Pay down existing balances either by chipping away at loans with the highest interest rates or eliminating smaller debt first.

• Save for retirement. Open or increase contributions to a tax-deferred savings plan such as a 401(k) or an IRA. Where can you get one? Your hometown bank can help set up an IRA, while a 401(k) plan is employer-sponsored.

• Put it toward a down payment. The biggest challenge that most first-time home buyers face is coming up with enough money for a down payment. If you intend to buy a new home in the near future, putting your tax refund toward the down payment is a smart move.

• Invest in your current home. Use your refund to invest in home improvements that will pay you back in the long term by increasing the value of your home. This can include small, cost-effective upgrades like energy-efficient appliances that will pay off in both the short and long-term. If you have more substantial renovations in mind, your bank can help with a home equity line of credit.

In addition to preparing for tax refunds, the NHBA has been committed to keeping consumers informed and educated on a variety of personal financial topics, such as cyber security and ID theft, strategies for savings, and holiday shopping and end-of-year tips.

For more information and resources on personal banking and finance, please visit the Consumer Tips & Resources section of NHBA’s website at nhbankers.com.