Tag Archives: Student

7 Worthwhile Ways to Use Your Tax Refund

 

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According to the Internal Revenue Service, more than 70 percent of the nation’s taxpayers received a tax refund averaging nearly $3,000 in 2017 and will get a similar amount this year. As Americans receive their refunds along with additional benefits coming from the Tax Cuts and Jobs Act passed in December, we have highlighted seven tips to help them use their money wisely.

To help consumers make the most out of their money, We have provided you with the following tips.

  • Save for emergencies.  More than 60 percent of Americans are not prepared for unexpected expenses. You can prepare by opening or adding to a savings account that serves as an “emergency fund.” Ideally, it should hold about three-to-six months of living expenses in case of sudden financial hardships like losing your job or having to replace your car.
  • Pay off debt.  Pay down existing balances either by chipping away at loans with the highest interest rates or eliminating smaller debt first.
  • Save for retirement, your child’s education or future health expenses. Open or increase contributions to a tax-deferred savings plan like a 401(k) or an IRA. Your bank can help set up an IRA, while a 401(k) is employer-sponsored. Look into opening a tax-advantaged 529 education savings plan to ensure school expenses will be covered when your child reaches college age. Or save for future health expenses with tax-free dollars by investing in a Health Savings Account.
  • Pay down your mortgage or student loans.  Make an extra payment on your mortgage or student loans each year to save money on interest while reducing the term of your loans. Be sure to inform your lender that your extra payments should be applied to principal, not interest.
  • Invest safely with U.S. savings bonds or municipal bonds. The U.S. Treasury allows for savings bond to be purchased using your tax refund for as little as $50. Savings bonds earn interest for a maximum of 30 years.
  • Invest in your current home.  Use your refund to invest in home improvements that will pay you back in the long run by increasing the value of your home.  This can include small, cost-effective upgrades like energy-efficient appliances that will pay off in both the short and long term – and with tax credits (as long as Congress continues to renew the program).
  • Donate to charity.  The benefit is two-fold: Giving to charity will make a difference in your community, and you can also claim the tax deduction, if you itemize.

Resource information provided by the American Bankers Association.

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8 Money Tips Every College Freshman Should Know

With Labor Day behind us, most colleges are underway with the fall semester. The American Bankers Association encourages college students to get an early start on securing their financial future. Check out these eight tips on how to avoid expenses now and reduce financial burden upon graduation.

  • Create a budget.  You’re an adult now and are responsible for managing your own finances. The first step is to create a realistic budget or plan and stick to it.
  • Watch spending. Keep receipts and track spending in a notebook or a mobile app.  Pace spending and increase saving by cutting unnecessary expenses like eating out or shopping so that your money can last throughout the semester.
  • Use credit wisely. Understand the responsibilities and benefits of credit.  Use it, but don’t abuse it.  How you handle your credit in college could affect you well after graduation.  Shop around for a card that best suits your needs.
  • Lookout for money. There’s a lot of money available for students — you just have to look for it. Apply for scholarships, and look for student discounts or other deals. Many national retailers offer significant discounts for those with a valid student ID.
  • Buy used.  Consider buying used books or ordering them online.  Buying books can become expensive and often used books are in just as good of shape as new ones.  Dedicate some time and research to see what deals you can find.
  • Entertain on a budget. Limit your “hanging out” fund.  There are lots of fun activities to keep you busy in college and many are free for students. Use your meal plan or sample new recipes instead of eating out. If you do go out, take advantage of special offers that occur during the week, like discount movie ticket days or weekly restaurant specials.
  • Expect the unexpected.  Things happen, and it’s important that you are financially prepared when your car or computer breaks down or you have to buy an unexpected ticket home.  You should start putting some money away immediately, no matter how small the amount.
  • Ask. This is a learning experience, so if you need help, ask.  Your parents or your bank are a good place to start, and remember—the sooner the better.

For more tips and resources on a variety of personal finance topics such as mortgages, credit cards, protecting your identity and saving for college, visit aba.com/Consumers.