Experts Recommend Prioritizing Debt Repayment with Tax Refunds to Avoid High-Interest Rates
Financial Advisers Stress the Importance of Setting Aside Money for Unexpected Expenses After Tax Season
According to KXAN, after tax season ends people get tax refunds which can be a lot of money. The average tax refund in 2024 was about $3,011. But figuring out what to do with that money can be tricky. Some people might want to pay off debts they owe like credit card bills because those can quickly grow with high interest rates. Arijit Roy from U.S. Bank says it’s important to tackle debts first, especially ones that keep adding up, before doing anything else.
Saving for emergencies is also really important. With things like rent and groceries getting more expensive having some money set aside for unexpected expenses is a good idea. Experts say it’s smart to have enough saved to cover at least three to six months of living expenses. Jeff Massey suggests a method called the “snowball effect” for paying off debts. You focus on the debt with the highest interest rate first then move on to the next one. Experts also talk about the power of compound interest and starting small when it comes to saving money. A little bit saved regularly can add up over time. They also mention that while the economy might seem okay overall many people are struggling with credit card debt. So, it’s important to be careful with spending and make smart choices with tax refund money. Overall, figuring out what to do with a tax refund involves balancing paying off debts, saving for emergencies, and being mindful of spending habits.
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2024 Tax Refunds: Managing $3,011 Wisely – Debt Payoff, Emergency Savings, and Smart Spending Strategies! (PHOTO: Financial Counseling)
Financial Experts Offer Advice on How to Manage Tax Refunds and Build Financial Security
Furthermore, experts say it’s a good idea to keep saving money even after tax season is over. They suggest using the same plan with any extra money you get during the year like bonuses or extra paychecks. By focusing on paying off debts and building up savings for emergencies you can make sure your finances are strong. Starting with small amounts and saving regularly can also help your tax refund money grow over time. With more people dealing with credit card debt and uncertain economic times, it’s important to be smart with your money all year round.
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