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5 Ways to Use Your Tax Refund to Establish Financial Confidence

COMMUNITY FIRST Credit Union Love Where You Bank WAYS to use Your TAX REFUND E PLURIBUS UNUM to Establish Financial Confidence When you have a tax refund or performance bonus in your hand, it's tempting to spend it right away. Instead of repeating the behaviors of previous years, try something new to turn this extra cash into financial confidence. Here are some simple tips from Community First's moveUP Financial Wellness Program. Use the 50/20/30 Formula When you come into a large sum of money and don't know what to do with it, a good rule of thumb is the 50/20/30 formula. Allot 50 percent of the total funds to pay down debt, 20 percent to savings and 30 percent for short-term spending. Start or expand your emergency fund If you don't have an emergency fund to ease the stress of the next unexpected expense, use a portion of your refund or bonus to establish one. Consider contributing 70 percent of the total if you are just getting started. If you already have $2,000 in savings, allocate 20 percent of your refund to keep it growing. Pay off high interest debts If you have an emergency account, consider using 50 percent of your refund or bonus to pay down high-interest debt. If you already used a larger portion of this money to 24 establish your emergency fund, instead think about setting 20 percent aside to pay down debt. Spoil yourself, but only a little Consider "paying" yourself 30 percent if your emergency fund is over $2,000. If not, this number should be 10 percent. If you are planning a summer vacation or weekend getaway, use your refund to prepay the hotel room or plane tickets. Often you can get a discount on hotel rates if you pay in advance - and you won't have bills to pay when you get back. Review your tax withholdings Finally, if you've received a sizable refund, you may be paying too much in taxes throughout the year. Consider adjusting your tax withholdings so that less money is taken out of each paycheck. You can use that money to increase your contribution to an employer-sponsored retirement plan or health savings account. Community First moveUP Financial Wellness Program helps improve your money management skills and gives you the tools you need to reach your financial goals. Take the first steps toward financial confidence by visiting The site offers budgeting solutions, saving tips, retirement investing strategies and more. ©2017 Community First Credit Union NCUA LOUAL MO LENDER

5 Ways to Use Your Tax Refund to Establish Financial Confidence

shared by communityfirstfl on Jan 11
Using your tax refund or bonus to improve your financial future might seem difficult, but following the 50/20/30 formula, it can be simple.


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