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United Federal Credit Union offers tips on what to do with your tax refund

ST. JOSEPH, MI (April 13, 2015) — You have survived another tax season and—good news—this year you’re getting a refund! Now the question is, what should you do with it? United Federal Credit Union (UFCU) has advice on maximizing your refund.
First thing’s first—Have a plan!

Before you dive right into spending your tax refund, make a list of ways you would want to use the money and separate them into “needs” and “wants.” UFCU Budget Counselor Judy Baker describes “needs” as expenses required to cover things like food, home and bills, and “wants” as anything that would be nice to have but is not critical. Figure out how much each item on the list would cost and find combinations that give you the biggest bang for your buck—starting with the “needs” side first.
Ideas to get you started

Consider adding these thoughts to your list:

Pay off debt. A great way to utilize your tax refund dollars is to pay down or pay off high interest credit cards and save money in the long run. For example, if you had a credit card with a $2,500 balance at 18% interest, you would save approximately $325 in interest for the remainder of the year by using your refund to pay off the card in April.1 You could also make an extra mortgage or auto loan payment. Whatever debt you decide to tackle, it helps to shave off a little bit, even if it’s only a part of the total balance.
Bulk up your emergency fund. Using your tax refund to add to or start your emergency fund is always a smart idea. Baker recommends saving up three to six months’ worth of expenses as a safety net for unexpected emergencies like a layoff.
Make an investment. UFCU offers several ways for you to invest your tax refund, including a Share Certificate or Individual Retirement Account (IRA). Other ways to invest your refund include funding your Health Savings Account or adding to your 401k. The federal government has an annual cap on HSA and 401k contributions, so make sure the extra investment won’t put you over these amounts – (HSA $3,350 Single, $6,650 Family; 401k $18,000 Under 50, $24,000 Age 50 or older).
Continue your education. Going back to school to help advance your career can be satisfying and expensive. Depending on the size of your tax refund, you might be able to pay for textbooks and fees or even an entire semester worth of tuition. If the thought of heading back to college seems like a large step, consider attending a conference or workshop that focuses on furthering your career skills.
Tackle maintenance projects. Many home repair projects can get expensive—especially if you have an older home. With extra money in your pocket from a tax refund, you can finally replace an old furnace or air conditioning unit, patch a leaky roof, or put in energy efficient windows. Beyond home repair, consider updating worn out tires on your car or upgrading aging electronics.
Donate to a charity. As a credit union, UFCU believes in the philosophy of “people helping people.” Your tax refund might be the perfect opportunity for you to make a sizable donation to your favorite charity or non-profit organization. Not only will you be helping those in need, you can also record the donation as a write off on next year’s taxes.

As you can see, there are plenty of ways to put your tax refund to good use. The most important piece of advice is to let the money work for you in a way that is beneficial and agreeable to your household and your future financial goals.
For more tips on how to manage your money, visit the Advice Hub page on the UFCU website: http://unitedfcu.com/advice/hub/
1 Based on a $50 fixed monthly payment.
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About UFCU
United Federal Credit Union has served its Members since 1949 by helping them to build a sound financial future. UFCU consists of more than 130,000 Member/owners worldwide, and manages assets in excess of $1.83 billion. Its corporate offices and main branch are located in St. Joseph, Mich., with additional branches in Arkansas, Indiana, Michigan, North Carolina, Nevada, and Ohio.