Spend

3 Smart Ways to Spend Your Tax Refund

January 21, 2021  |  Porte Team
spend

One of the silver linings of filing your taxes is the opportunity to receive a tax refund. Big or small, this refund  can get you one step closer to financial freedom. While what you do with your tax refund is solely up to you, here are three smart ways to spend your tax refund for you to consider.

anchor

Paying off debt

Using your refund to pay-down existing high-interest debt, like credit cards, student loans, or medical bills is one of the smartest things you can do with your tax refund, in our book.

Be sure to apply your tax refund directly to the principal amount to help decrease the amount of interest the debt accumulates each month. Even small, additional payments can help you pay off the debt sooner, and help you save money over time.

anchor

Major necessary purchase(s)

Cars and homes fall under this category. You add your tax refund to your down payment for one of these large purchases. Putting more money down has plenty of advantages.

For cars, having a larger down payment means you’ll have a lower monthly payment on your auto loan, and you can potentially get a better interest rate.

For homes, having a larger down payment means you’ll have a smaller mortgage loan balance, you can potentially have lower mortgage rates, and you may be able to reduce or eliminate mortgage insurance premiums.

anchor

Investing it

There are several ways you can choose to invest your tax refund. Some ideas include:

  • Investing it in your workplace retirement account (especially if your employer matches your contributions)
  • Contribute it to an IRA
  • Build up a rainy day fund in a high-yield savings account
  • Start a college savings account for your child(ren)

If you’re unsure of where to begin investing your money, or need help to determine the best way to invest your tax refund, we recommend consulting a certified financial advisor.

With careful consideration and planning, you’ll be able to find the perfect way to spend your tax refund, getting you one step closer to financial freedom.

No results for “

Please try another search term.

Related Articles

Download the app1 to openDowload the app image - config an account2

block-half-cards-single-card content
  1. Standard data rates, fees, and charges may apply. Consent to receive electronic account disclosures required to use the app.
  2. **IMPORTANT INFORMATION FOR OPENING A NEW DEPOSIT ACCOUNT:** To help the federal government fight the funding of terrorism and money laundering activities, the USA PATRIOT Act requires us to obtain, verify, and record information that identifies each person who opens an Account. **WHAT THIS MEANS FOR YOU:** When you open an Account, we will ask for your **name, address, date of birth, and your government ID number.** We may also ask to see a copy of your driver’s license or other documents at any time. All Accounts are opened subject to our ability to verify your identity by requiring acceptable types of identification. We may validate the information you provide us to ensure we have a reasonable belief of your identity. If we are not able to verify your identity to our satisfaction, we will not open your Account or we may close the Account if it was previously funded. Your Account is subject to fraud prevention restrictions at any time, with or without notice.
  • Apple® and Apple Pay® are trademarks of Apple Inc. A list of compatible Apple Pay devices can be found here: [https://support.apple.com/en-us/HT208531](https://support.apple.com/en-us/HT208531){: target="_blank" rel="noreferrer noopener"}.  Google Pay™ and Google Play™ are trademarks of Google LLC.  Porte is a mobile finance app, not a bank. Banking services provided by Pathward, National Association, Member FDIC.  Porte is a deposit account established by Pathward®, National Association, Member FDIC, and the Porte Debit Card is issued by Pathward, N.A., pursuant to a license from Visa U.S.A. Inc. Certain products and services may be licensed under U.S. Patent Nos. 6,000,608 and 6,189,787. Card may be used everywhere Visa debit cards are accepted. Porte is a registered trademark of Populus Financial Group. Populus Financial Group, Inc. engages in money transmission services as an authorized delegate of NetSpend Corporation (NMLS \\#932678). State licenses, disclosures, and complaint information may be found here [www.netspend.com/help/licenses](https://www.netspend.com/help/licenses){: target="_blank" rel="noreferrer noopener"} © 2024 Netspend Corporation. All rights reserved worldwide. Netspend is the federally registered U.S. service mark of Netspend Corporation. All other trademarks and service marks belong to their owners.  Copyright © Populus Financial Group, Inc. 2024. All rights reserved.