You probably already have big plans for your tax refund. Maybe you imagine a major purchase, like a new computer or TV. Or perhaps you’re going the safe route and placing it directly into your savings account. 

There are several smart options for your refund that you may not be aware of. Here are a few choices you can make with your money that offer lasting benefits to your finances. 

What Should I Do With My Tax Refund?

1. Contribute to a Retirement Account

Regardless of age, retirement savings should not be put off. Contributing to an employer-provided 401(k) not only increases your retirement savings, but also reduces your taxable income. That means your tax burden will be much lower for the year the contribution was made, saving you money in the process. 

2. Pay Down High-Interest Debt

Certain types of debt are more damaging than others. Take high-interest credit cards; the higher the interest rate, the more you pay for the purchases you make using credit. If you have high-interest cards open, focus on paying them off as quickly as possible. Making more than the minimum payment reduces your interest burden and helps you pay down debt faster. 

3. Attend School or Training Courses

Using money to advance your education or undergo career training is a huge investment in yourself. For example, if there is a position at your place of work that requires a particular certificate or degree, you can use your tax refund to pursue it. Even better, many education costs can be deducted from next years’ taxes. 

4. Look for Passive Income Investments

Your tax refund may not be enough to purchase a rental property, but it could allow access to other types of passive income. For instance, crowdfunding allows you to invest in up-and-coming businesses in exchange for some kind of reward. Crowdfunding often uses investment tiers, which means you can spend as much or as little as you see fit. 

If you’d like more advice on how to use your tax refund wisely, Hawaii County Employees Federal Credit Union is here to help. Along with checking and savings accounts, they also offer money market accounts and several IRA accounts to expand your retirement savings even further. Stop by the Hilo, HI, branch, or call (808) 935-2969 today to learn how you can open a savings account or access other essential financial services. You can also visit the website for a full list of financial accounts.