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Put Your Tax Refund Toward Debt (or Other Financial Goals)

Kyle James Aug 16, 2017. 16 comments

A tax refund isn't free money; in most case you simply paid too much in withholdings. If you remember that your refund is income that could have gone to your financial priorities, you can resist the temptation to spend it away. Here's what we mean.

First priority: pay down credit card debt. By allocating your tax refund to pay down high interest debt, you get the most bang for your buck. For example, by throwing your refund at debt with 18% interest, you essentially earn 18% on your investment.

If you've paid down your debt, you can use it to pad your emergency fund, make contributions to a Roth IRA, or start investing (if you haven't already).

The folks at GOBankingRates put together a handy list of 7 priorities when spending your tax refund tailored to fit your financial goals and situation—all timely reminders before your tax refund arrives.

Here's the First Thing You Should Do With Your Tax Refund | GOBankingRates

Photo by eFile989

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