You worked hard to complete your taxes, but now one question remains: Do you want your refund to work hard for you? While you may be tempted to use the money to pay for a vacation or buy something from your wish list, it can be more practical to use the funds, or at least some of them, to enhance your financial picture.

With the average tax refund ranking in at more than $3,000, Cheryl Hawkins Tax and Accounting, a trusted CPA in Jordan, MN, says there are many opportunities to use the money you received productively to build wealth. If you’re wondering how to use your tax refund to better your long-term financial future, this Scott County accounting service recommends:

• Paying Off Debt: Whether you have some credit card balances lingering over your bank account or want to make a major dent in those student loans, your tax refund can help. While it may feel like paying a bill, making an effort to pay more than the minimum amount will not only bring you closer to a zero balance—it will reduce the interest you accrue over time.
• Supplementing Savings: Typically, the more money you have set aside in a savings account, the more interest you will earn. One of the smartest ways to save your tax refund is to put it toward your retirement savings account, an act which could help you save on taxes next year. You may also think about putting the funds into a college savings account for your child or simply bringing your safety net up to speed.
• Investing: Building wealth with your tax return could afford you some pretty decent assets. In addition to standard stock investments, you could use the money to invest in your home by making improvements that add value to the property.

Whatever option you choose, it’s important to remember none of them mean giving up your tax refund, even though it may seem this way. In every case, using your tax refund responsibly is designed to either help you save money or build funds for the future.

If you have a tax refund on your hands, a professional CPA can help you explore your options and determine which will fit your financial goals. In many cases, they can even help you optimize your refund the next time you file. For expert assistance with financial and tax planning in Jordan, MN, contact Cheryl Hawkins Tax and Accounting by calling (952) 222-8272.