3 Things You Should and Should Not Do with Your Tax Refund

Tax season is well underway and it’s likely that you’ve already filed, and are patiently awaiting your tax return.

While having extra cash on hand can’t hurt anything, it’s definitely possible to make some good and not so good uses of it. Here’s a short list of do’s and don’ts that’ll hopefully be your compass leading to a good use of your return.

Do’s:

Pay Off Debt

Whether it’s student loans, credit card payments, a car loan, or any other sort of payment, it’s always a good idea to use what you can to reduce the principal amount. Minimum payments may not seem like a lot in the short term but definitely will cost more in the long run.

Boost Your Savings

You never know when you’re going to need to dip into your emergency fund, but you’d certainly feel better about it if you parked your tax return into that account. With the surprise expenses that life, cars, and owning a home can bring, it’ll be nicer to put that money into action without worrying as much.

Invest

We know money doesn’t grow on trees, but we also know of many other places money can grow. Whether it’s in the stock market, your retirement account, treasury bills, municipal bonds, or even shares of a local company, investing that extra handful of cash can bring more financial security down the road.

Another way to invest is in your own property. Using your tax return as a down payment on a house or mortgage is an investment in your future. If you’d like advice on purchasing a new home contact St. Cloud Federal Credit Union.

Don'ts:

Buy Lots of Small Things

It’s tempting to resist the urge to splurge. Maybe coffee every morning for a few weeks or entering a retailer and leaving with 12 additional items sounds good in the moment, but those little purchases can create a huge dent in your return. There’s a reason small buys seem to add up quickly, and that’s because we consider the purchases too small to make a difference.

Buy a New Car

That extra boost of cash may seem like the perfect time to upgrade your existing vehicle, but when you look at the size or your return and the overall cost, it’s pennies in the bucket. Modern cars often make it well past 200,000 miles if properly maintained, so consider whether or not the purchase is a want or need before heading to your dealership.

Spend it on Impulse

A night on the town with great food and drink is something most of us can appreciate, but not something our bank accounts will. A good rule of thumb is to ask yourself how long this purchase will benefit you. Whether it’s a round of golf, movie tickets, a cappuccino, or anything in between, the thrill only lasts as long as it takes to finish it.



Your tax return can be a great help and with a little effort, you’ll be thanking yourself later. We hope these tips will help you put your tax return to good use, and lead you to a pat on the back from your future self. Be sure to follow us on Facebook for more helpful tips, and put your tax return to good use!

Taxing Us Could = Taxing YOU

You may have heard that Congress is considering an overhaul of the federal tax code. That would possibly include the elimination of the tax exempt status for credit unions .

What would that mean to you?

• That action could possibly eliminate credit unions as they now exist. And a tax on credit unions is really just additional taxes on you .
• Without credit unions, banks would have no competition. And that would most likely drive up the cost of financial services for all consumers.

St. Cloud Federal Credit Union is owned and directed by you, through our volunteer board of directors. Unlike banks that maximize profits for a small group of investors, credit unions exist to serve their members, including working families, local small businesses and your community. Since 1937, federal credit unions have been chartered by the federal government as non-for-profit financial cooperatives. Not-for-profit means the members are the owners, and no one is making a personal profit.

Bankers and some politicians in Washington say the federal budget can be balanced by taxing credit unions. But credit unions hold only 6 percent of all financial assets nationwide. Banks hold 94%!

Taxing credit unions won’t make a dent in our federal budget deficit. For every $1 in new taxes on credit unions, the government would take away $10 that credit unions put back in your pockets in the form of better rates and lower fees.

If the tax exemption is ended, it will result in higher taxes for 1.5 million consumers in Minnesota  who are credit union members, as well as 96 million consumers across the country.

Join us, and TAKE ACTION and tell Congress: “Don’t Tax My Credit Union!”  Please visit www.DontTaxMyCreditUnion.org to learn more, and to send a message to your legislators.

If you have any questions, please contact me at 320-252-2634.

Sincerely,
Bill Winter
CEO
St. Cloud Federal Credit Union

Tax Refunds: How Will You Use them to Your Advantage?

Is your Tax Refund helping you become financially fit? IT CAN! Below are just a few of the many ways you can use your Tax Refund wisely to take steps toward financial fitness...

1. Pay off Debt & Bills

If you have overdue bills or loans, use your tax refund to pay them.  Once your debt is gone you'll feel much better!

2. Open a savings account

Not only will you have a safe place to save money, you'll be creating saving habits and establishing good financial history.

3. Buy a savings bond

Savings bonds can help you to save for emergencies or bigger purchases. You can also buy bonds in someone's name as a gift.

4. Create an emergency fund

Aim to save the amount of money that would pay expenses for 1-3 months in an emergency fund.  You never know when you'll need it!

5. Save for Education and/or Retirement

Save now so you, your child, or grandchild can spend less on a valuable education.  Also, it's never too early to save for retirement!

Although it can be difficult when you get that refund, think about how you can use it to help alleviate any other financial pressures.  It may not seem like the most fun way to spend it in the moment, but you'll more than likely thank yourself later.