An educational blog on financial matters from CPM Federal Credit Union
Financial Wellness for 2016
2016 is here!! Can you believe it?? The ball has dropped, confetti is cleaned up and resolutions have been made. Did any of your resolutions relate to your financial state?? Close behind the infamous weight loss resolution is bound to be financial resolutions. Did you save for Christmas or did Santa sneak up on you?? Maybe Christmas shopping expenses landed on a credit card that you want to pay off. How about your credit score? Is it as high as you would like for it to be?? Have you protected your family’s identity?? All of these are things that come to mind as we prepare to face another year!
If you have resolved that 2016 is the year that you will become more financially savvy and get your finances in tip top shape, we want to help you get started! Our blog for 2016 will focus on topics that relate to financial education. We will give you basic information on lots of topics to get you pointed in the right direction for financial wellness and prosperity. Click here for financial education resources.
Let’s get started! Here are a few things to consider about your tax return.
As you organize your documents in preparation for tax day, you may be dreaming about spending your tax refund on a trip, a new TV or a new computer. Although it may be tempting, think twice! Make the most of your tax refund by practicing some good-sense tips intended to help you get closer to your financial goals and a fit financial future.
Here are some smart ways to use your refund:
- Pay off any late utility or housing expenses.
- Pay down your credit card. Use your refund to pay the highest interest rate obligation. If you can wipe it out completely, even better.
- Pay periodic expenses. Get a head start on expenses that arise once or twice a year, such as insurance premiums, property taxes, and automobile registrations. Tax refunds can be used to pay these expenses or put into a savings account for when they are due.
- Set up an emergency fund or add to your current one. Your goal is to save enough to cover three to six months worth of critical expenses.
- Pay extra on your mortgage. Using your refund to reduce your mortgage debt can lead to long-term savings. You will pay your mortgage off faster and pay less in interest.
- Fix up your home. Increasing the value or safety of your home adds quality to your life.
- Service your car. Make certain you have reliable transportation; don’t put off that tune-up or oil change.
- Schedule a visit to the dentist. If you have been putting off your regular check-ups because of the expense, now’s the time to make an appointment. Being proactive can save your pocketbook (and your teeth!) in the long run.
- Start investing. People often mistakenly believe that they need a large amount for an initial investment. All you really need is a few hundred dollars to get started.
- Fund your children’s education. Putting money into an education savings plan will allow you to lay the groundwork for your child’s college education.
- Expand your horizons. Take a course, start an education fund, or train for something that will help you get ahead at work.
If you’re disappointed with the advice because you really wanted to treat yourself or your family to something special, don’t despair, compromise! Consider spending 80 percent of the refund wisely and splurging with the remaining 20 percent. Turn a week-long vacation idea into a nice long weekend away, a fantastic night on the town, or a day at the spa. Also consider putting it towards a membership that your family can use for the upcoming year, such as a zoo or athletic club membership. You’ll feel good knowing you made a great financial decision, while still being able to enjoy yourself.
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