Prepare for Life's Surprises...With Your Tax Return

The following post has been modified from the Military Saves Blog. Follow them on Facebook and Twitter!

By now, you may already know how you want to spend your tax return. Before you’ve spent the money in your mind, think about the many challenges that life can pose. These challenges can often be eased by having some money saved.

Here are some wise ways to spend your tax return in the New Year:

A “rainy day” fund isn’t just nice to have; it’s a must-have.

A solid “rainy day” or emergency savings fund is essential when you need cash up front. Whether you need to move in a pinch, fix a flat, or – perish the thoughta member of your household finds themselves unemployed, having a strong emergency savings can help you be ready for the expensive unexpected.

Save automatically for retirement.
Saving now for retirement will ensure that you have enough money to live a comfortable standard of living when you stop or reduce the amount of hours you work. Government employees, for example, have the option of signing up for the government-sponsored Thrift Savings Plan (TSP), which comes with some great tax benefits. If you haven’t started putting money away for retirement or could add more to it this year, consider using your tax return for this purpose.

Evaluate your insurance.
Have you recently moved? Moving to a new state might mean that you need to increase your auto insurance coverage. Has your family grown this year? It might be time to increase your life insurance. Do you have adequate renters or home owners insurance? Whatever life changes have occurred in 2014, the New Year is a wonderful time to evaluate your insurance needs, protect yourself, and use your tax return to make some needed adjustments.

Plan ahead for the 2015 holidays.
If you busted this year’s holiday budget or didn’t have one from the start, consider using some of your tax refund to establish a savings fund for next year’s holiday season. Doing so will help you have the money up front for gifts, decorations, food, travel expenses, and parties, rather than using debt-creating credit cards.

Spend a little on yourself. 
Since you've thought strategically about using your tax return and your other obligations have been met, it’s okay to spend a little money on yourself – you’ve earned it. Take some time to talk about the purchase you’d like to make or the place you’d like to go. Discounts and deals are plentiful after the holiday season, so shop smart!

Whatever your strategy, make sure you plan to use your tax return wisely, keeping in mind the many surprises life can throw your way. Be resilient. Set a goal. Make a plan. Save automatically.

Take the Pledge

I pledge to save money, reduce debt, and build wealth over time. I will encourage my family and friends to do the same

Take the America Saves Pledge

Tip of the Day

  • Written by Administrator2 | March 19, 2014

    Having emergency savings may be the most important way to stay afloat financially http://ow.ly/r6i1n

Saver Stories View all »

Taking Steps Toward Financial Fitness

Written by Tammy G. Bruzon | November 7, 2014

Nicky Vasquez learned about Virginia Saves when she attended her first class with Bank On Virginia Beach. The instructor shared how important it was to have a written savings goal, and the entire class joined Virginia Saves as the first step toward financial fitness.

Read more...

Getting Out of Debt

Written by Katie Bryan | October 28, 2013

In 2004, Tonya Shelton was facing financial ruin. Barely making more than minimum wage and having lost her home to an unexpected family crisis, Shelton and her family were forced to live in a rundown hotel.

Read more...

Transforming “I Can’t Save” to “I Will Save”

Written by Guest Blogger | January 13, 2016

You will not believe what it took to completely change my life. About three years ago, the HR Administrator of the corporation where I worked (as a temp with no benefits) forwarded an email to me. Fifteen seconds. One small act of kindness. That's it - that's all it took!

Read more...

Receive Updates

Sign up for Texts

Written by Tammy G. Bruzon | July 15, 2014

Sign Up

Sign up for Emails

Written by Super User | September 16, 2013

Get Emails

Take the Pledge

Written by Super User | September 16, 2013

Start Saving