Did you receive a tax refund this year? Recent data released by the Internal Revenue Service (IRS) shows the average tax refund amount is up $178 at the end of March 2024 compared to the same time last year. While it might be tempting to use your refund to splurge on something you’ve been wanting, this is a great chance to use the money to help position yourself to be more financially stable.
Here are some things to consider for your refund money.
1. Contributing to your emergency savings
Has your refrigerator or washing machine ever stopped working? Has your car stopped working and needs to be taken to an auto shop to be diagnosed? When a financial emergency occurs, it’s ideal to have funds set aside to cover the costs associated with the emergency. Keeping these funds in a separate savings account can help you resist the temptation to dip into them.
Ready to start your emergency fund? Open a First Bank Statement Savings1 account online today.
2. Saving for home purchase costs
Deciding to purchase a home is such an exciting milestone, but there are many financial aspects to take into consideration first. You’ll want to make sure you are saving for your down payment, inspection costs, and closing costs. Minimum down payment requirements can vary depending on the type of loan. Be sure to speak to a First Bank Mortgage home loan advisor for specific loan requirements and details.
3. Using a CD for long-term expenses
What big ticket items are you saving for? A wedding, your dream vacation, or a brand-new car? A Certificate of Deposit (CD) is a great way to secure funds needed for those expenses. By opening a CD, you’ll be able to lock in a higher fixed rate to help maximize your returns. Take advantage of one of our current special offers by opening a First Bank CD1 online today.
4. Investing in your retirement
Regardless of your age, saving for retirement should be part of your overall financial plan. If retirement isn’t that far away or you feel that you are behind in retirement savings, you’ll want to catch-up and start saving as much as you can. If you haven’t started saving for retirement yet, utilizing your tax refund to help you get started makes good financial sense.
Studies show that, on average, someone who was 65 years and older in 2021 spent $4,345 per month, or $52,141 per year. As prices continue to rise year after year, you can expect your expenses in retirement to rise as well. Don’t put off saving for the future.
While everyone’s situation is different and there is no specific amount that someone needs to have saved for retirement, a knowledgeable First Bank Wealth Management Advisor2 can help you assess your needs and wants in retirement and will develop a customized plan that allows you to live comfortably during your golden years.
5. Saving for college education
It’s no secret that most things have gotten more expensive over the years, and college tuition is no exception. In fact, recent data shows the average cost of tuition for the 2022-2023 school year at a public four-year university that’s in-state increased by $730. For an out-of-state public, four-year university, tuition increased by $1,310 and for private nonprofit, four-year universities, tuition increased by $2,220. These increases highlight the importance of saving for college expenses early as they’re likely to only get more expensive over time. Fortunately, we have options such as a Coverdell Education Savings1 and a state-sponsored 529 Plan2 that can help you start saving.
No matter how you decide to use your tax refund this year, know that you can rely on First Bank to help you achieve all of your financial goals. For more information on how our products and services can meet your financial needs, contact a trusted First Bank advisor.
2Investment and insurance products are offered through OSAIC INSTITUTIONS, INC., Member FINRA/SIPC. Osaic Institutions and First Bank are not affiliated. Osaic Institutions does insurance business in California as Osaic Institutions Insurance Agency, CA Agency License #OH30186. Products and investment advisory services made available through Osaic Institutions are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value. First Bank Wealth Management is a trade name of First Bank, and certain products and services are provided through First Bank, and its affiliates and subsidiaries. Neither Osaic Institutions or First Bank, nor any of their affiliates or financial advisors, provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions. Use FINRA’s BrokerCheck to learn about the professional background, certifications, licenses, and any regulatory violations or complaints for any financial advisor.