Spend It or Save It: Tax Refund Tips for Credit Union Members

spend-or-saveAccording to statistics posted by the Internal Revenue Service, approximately eight out of every ten people who file taxes in the United States will get a federal tax refund. IRS data reveals that the average return is approximately $2,800. While most financial planners will tell you that it is better to “break even” with your taxes instead of paying or getting a refund, more and more Americans are receiving refunds each year. Figuring out what to do with your refund can be as simple as looking at the options available through St Anne Credit Union in New Bedford.

Your New Bedford CU can help you find new ways to save and invest your money. Whether you choose to deposit it into your credit union checking account or New Bedford Share savings is up to you, but there are other options that you should explore. For refunds that are $2,500 or higher, depositing your money into a money market account or a certificate of deposit just might be the way to go. Using your refund to pay off your home or auto loan is another. Either way, it all starts with a credit union savings account for people who work or live in Bristol and Plymouth counties right here in Southeastern Massachusetts.

What Do Most People Do With a Refund?

Sometimes it can be helpful to look at what others are doing with their tax refund. According to a credit union study that was conducted in 2014, there are three primary things that members with a credit union savings account or checking account will do with their money. Let’s take a look at what they do with their money and see if it might inspire you to do something worthy with your refund.

  • PAY OFF DEBT – The best way to start getting more out of your paychecks and learn how to avoid living paycheck to paycheck is to pay down debt. Credit cards, auto and home loans are the top forms of debt that people pay off with their tax refunds.
  • INVEST IN SAVINGS – Whether you are using your New Bedford Share savings account to save for retirement, a college education or to put money away for a rainy day, investing in your credit union savings account is a smart way to go.
  • PURCHASE BIG-TICKET ITEMS – Some people prefer to spend their entire refund check on a big-ticket item that they otherwise couldn’t afford. Televisions and other electronics are high on the list of the most-purchased refund check items.

What to Do With Your Savings

Once you have decided to invest your tax refund into an account with St Anne Credit Union in New Bedford, the only thing left is to set some goals, decide what you are saving for and to pick an account option that would help you to put your money to work for you best. Some common goals for a credit union savings account is to start an emergency fund. Having an extra $1,000 on hand for emergencies like car problems, home repairs and other unexpected expenses can help you to keep your savings plan on-track. However, an emergency fund that covers three to six months’ worth of income in case you were to lose your job or become injured at work can help to protect your family in a whole new way.

Saving for a college education for your child or retirement for yourself in the future is another popular goal for our New Bedford CU members. College tuition can be costly, but investing in a money market account or other higher interest savings program can be very beneficial. St Anne Credit Union in New Bedford even has an IRA Share account options that only requires a minimum deposit of $500 to get started. This is a great way to begin saving for your retirement no matter what your current age.

Make Your Plans Before You Get Your Cash

Financial experts say that the best way to make sure you don’t spend your money unwisely or use it to buy big-ticket items that you don’t need is to make your plans on what you will do with your money even before you file your taxes. One recent study showed that 79 percent of those getting a refund have already decided what they will spend their money on before they get their tax refund back. Approximately 13 percent of Americans received a tax refund of $5,000 or more in 2014 and as much as 57 percent received $1,000 or more. It doesn’t matter who you are or what your finances happen to be, a thousand dollars is a lot of money and should be managed wisely.

To find out about credit union savings account and checking account opportunities at St Anne Credit Union in New Bedford, give us a call or stop by our local office. Your New Bedford CU can help you make the most of your annual tax refund and provide you with the tools you need to help your money grow!