Invest in yourself this tax season

Tax season is upon us once again! Depending on your planning and how much you had withheld from your income throughout the year, you might be receiving a refund. That age-old question comes around every spring: What should I do with my tax refund?

It’s your money and you can do whatever you choose, but we suggest avoiding unnecessary shopping sprees or visits to the casino. Instead, invest it in yourself. The following are wise ways to invest in yourself with the money you gave Uncle Sam in excess.

Boost your emergency fund

Preparing mentally and financially for life’s unexpected rainy-day events is important. The typical recommendation is to have 3-5 months’ salary in savings. This number can fluctuate based on your marital status, phase of life, and personal preference. Here’s another blog outlining what you should keep in savings.

Pay down debt

Focus on paying down any high-interest debt like credit cards. This will help you in the long run by reducing the overall amount of interest paid on your debt. And just imagine how you’ll feel when your debt payments are gone!

Add to retirement savings

Adding extra money to your retirement savings is never a bad idea. In fact, it’s easy to use Online Investing with UBT to open a traditional or Roth IRA.* Remember, an additional $1,200 a year invested in the stock market could potentially add $60,000+ to your retirement nest egg (when you factor in average historic yields).

Establish short-term savings

A short-term savings account aims to plan for expenses you know you’ll be incurring in the not-so-distant future. Typical short-term savings goals could include a vacation, home repair or remodel, or a wedding. Having sufficient funds to cover all or a portion of expenses you know you’ll be incurring keeps you from taking on new debt to fund them.

Invest toward larger long-term purchases

No, your tax return probably won’t buy you a new car or a kitchen remodel, but you can put it to work as kickoff funding into an investment account to get you there faster. You can open a taxable account with UBT’s Online Investing and use our portfolios to start saving toward that future purchase.

Avoid squandering this year’s tax refund, and instead, invest in yourself. Your future self will be thankful you did!