Tax refund advice: Save some, spend some

 

Feature Articles: Taxes

 

Tax refund advice: Save some, spend some

Linda Geist, Writer, Extension Communications; Story source: Andrew
Zumwalt, Assistant Extension Professor & Associate State Specialist, Personal Financial Planning,
University of Missouri Extension

 

Refunds are ready to roll out. Uncle Sam sends Missourians an
average income tax refund of $2,612, according to IRS data.

 

Hold on to some of that cash, says Andrew Zumwalt, personal finance
specialist with University of Missouri Extension. Refunds are wages
you earn throughout the year and should be thought of as hard-earned
money rather than found money, Zumwalt says.

 

For the wise, a refund windfall is a chance to stash some of the
cash in an emergency fund. Use some to pay down high-interest debt.

 

Zumwalt heads MU Extension’s VITA (Volunteer Income Tax Assistance)
program, which offers free tax preparation throughout the state for
qualified individuals and households.

 

Zumwalt offers these financial tips:

 

• Save part of your refund for emergencies. Save $500-$1,000 or more
  for unexpected repairs or medical bills that could create a
  financial crisis and add to your debt.


• Jump-start a savings account by using part of your refund. Have
  part of your refund electronically deposited into a savings account.
  You can have your refund direct-deposited into more than one account
  using IRS Form 8888. Set up a savings account before you file your
  taxes if you don’t already have one; have your account and routing
  number with you when you go to your tax filer.


• Pay down high-interest debt with some of your refund. If you have
  more than one credit card, pay off the card with the highest
  interest first.

 

For information about the VITA tax program in Missouri, go to
extension.missouri.edu/hes/taxed/vitasites.htm.

 

 

This story was originally published by MU Extension news:
http://extension.missouri.edu/n/2728

Last update:
Monday, March 28, 2016