Shani Curry-St. ViI, speaks, writes, and teaches about financial literacy. The head of Purse Empowerment, a financial consultancy supporting women with the information, keys and ideas to learn, grow, and share within the areas of financial literacy. Curry-St.Vil speaks makes financial jargon sexy, simple and real.
Here, the Miami-based wife and mother of two sons, offers sound tips on how to spend your tax refund wisely. –yvette caslin
10. Put your money where your plans are: Decide what you’re going to do with it, before you get it!
The average tax return in 2012 was $2,999. Think of this influx of cash as a savings account that you have been contributing to for a year, because you actually have. Review your new year’s resolutions and decide how this money can start you on that path. Were your goals to save more money, live debt free, purchase a new home, and or register for a course? Here, is your chance to put your money where your plans are. This will be the year that at the end of tax season that you will actually know where the heck your money went!
9. Eliminate debt or pay a bill up for a year
This step is twofold. Select a debtor that has been dragging down your credit score, and blowing up your cell phone and shut them up forever by paying them off! If you are already debt-free select a bill and pay it off for a year. Choose a utility bill, a phone provider, and or an insurance provider. Often, doing so can help you escape interest, and serve as a buffer if you meet financial challenges mid-year! I love it1
8. Pay down the principal on your car or home
Send those people their money, so that you can keep more of yours. Paying extra toward your principal knocks off the amortization table of your loans. Thus, slashing the interest, and positions you to pay the debt down in less time! Be sure to send a letter accompanying your extra payment that specifies that this additional payment is to go directly toward the principal of the loan. Be sure to call to request a letter from your lender that states such happenings!
7. Put it in a CD (certificate of deposit)
If when you began planning what you’re going to do with tax refund dollars, and all you can think about is rewarding yourself with more things that will make you look better rather than make you do better financially; lock the money away. Penalties associated with prematurely withdrawing from a CD’s should motivate you not to withdraw the monies without good reason. Reserve the money until you get your head together. CD terms range from 1 month to 48 months. If a year passes and you still lack a sound plan for your dollars, allow it to rest in CD collecting interest . The worse thing that could happen by delaying is you could end up keeping the money in a CD until next year, and do it ah-gain!
6. Start or add to a child’s college fund
In 20 years, it will cost to send a child to college. Get a load of that! So any lump sum of cash that you can pump into this cost prematurely is sensible. Get started on a Prepaid plan that allows you to pay todays cost on tomorrows money. Get started on 529 plan that will invest the dollars for you now, to help offset tomorrows cost. If yo can afford to store away the entire EIC (Earned Income Credit) for each child would really be smart. When affordable this is a great plan to implement annually, so college cost do not take you by surprise.
