From finance and housing expert Clyde Anderson:
The 15th has come and gone, taxes have been sealed and mailed, or extensions hopefully have been filed. You may be one of many lucky Americans who's receiving a refund - or maybe it's already arrived. The question I pose to you is what are you going to do with that refund? Have you already designated it to a cause, like paying your mortgage or maybe paying off some of that high interest rate debt?
I've compiled 5 suggestions on what you may want to use that coveted tax refund for:
1. Pay off High interest rate credit and debts
Why: Doesn't make sense to invest or hold excess money in savings when your paying 26% on a credit card. Also pay off personal loans, student loans, auto loans
2. Add money to your emergency fund
Why: You should have at least 3-6 months salary saved, especially in this economy to cover monthly necessities, in case you lose a job or income stream.
3. Have money direct-deposited to savings. Most people think twice before withdrawing from savings as opposed to checking
Why: Put some money away in savings to cover the oh yeah bills, oops bills or the forgotten bills, such as insurance premiums, home warranties, club memberships, etcâ€¦
4. After high interest rate loans are paid off consider increasing investments (IRAs, money-market accounts, 401ks – especially if they're matched by your employer)
Why: Now that your high interest rate debt is paid, put yourself in position to have compounding interest work for you instead of against you.
5. Start a business
Why: Invest in your future, if you've always wanted to start a business maybe this is the time.
The key to remember is this is your money, not lottery winnings. It's money that you have given to the IRS and haven't earned any interest on. So it would seem to me there is some ground that needs to be recovered. In order to maximize that refund I recommend having a plan and assessing those dollars to a specific cause rather than seeing it lost due to lack of planning.
Look for Clyde Anderson's Home School Segment tomorrow on CNN Saturday Morning with TJ Holmes, beginning 6am ET/ 3am PT.