The average tax refund in 2024 was $3,182. How are you planning to spend yours this year? While it might be tempting to splurge on shopping, plan a vacation, or upgrade your tech, your refund can be a powerful tool in strengthening your financial future.

Here are three smart ways to put that extra cash to work:

1) Bulk Up Your Emergency Fund

Life happens. Whether it’s an unexpected car repair, medical expense, or job transition, having 3-6 months' worth of expenses set aside can be a game-changer. Here are a few ways you can begin building your savings with your tax refund:

• Stash it in a High Yield Savings account to earn more interest. 
• Cover any recent unexpected expenses to avoid dipping into savings in the future. 
• Split your refund by saving a portion now and set up automatic transfers to continue building over time.

2) Pay Down Credit Card Debt

High-interest debt can hold you back from financial freedom. Just as compound interest helps grow investments, it can also work against you when it comes to debt—causing balances to snowball. Consider using your refund to:

• Pay off high-interest credit card balances first.
• Tackle student loans or other outstanding debts.
• Get ahead on monthly payments by paying off multiple months in advance.

3) Invest in Your Future

Your tax refund can be a great way to jumpstart or boost your investments. Here’s how:

• Max out your 2025 Roth IRA contribution ($7,000, or $8,000 if you’re 50+).
• Fund a Health Savings Account (HSA) for tax-free medical savings and investment growth.
• Create a financial plan that aligns with your short and long-term financial goals.

Not sure where to start? 

Let’s talk! Schedule a complimentary consultation with our team and take the next step toward your financial future.