3 smart things to do with your 2017 tax refund
If you’re expecting a tax refund this year, consider using it to improve your financial health.
While it’s too early to know what the average tax refund will be in 2017, if the trends of the past few years continue, Americans will be getting back about $125 billion during the upcoming tax season. This will likely translate to more than $3,000 each for the more than 80% of taxpayers who get a refund. If you’re one of the millions expecting a tax refund check in 2017, here are three better ways to use it than spending it at the mall, going out to fancy meals or taking a pricey vacation.
- Get rid of your high-interest debt
How much credit card debt is too much? Many experts say that you should try to keep your total credit utilization below 30% of your available credit – that is, if you have a $10,000 credit limit, you should try to keep your balance below $3,000. However, I take a much more conservative view. I say that any credit card debt you’re paying interest on is too much, and should be your first priority if you’re getting a tax refund in 2017.
I listed this first for a reason. Simply put, it doesn’t make sense to put more money in your savings or even to invest when you’re paying someone else 16% interest or more for the privilege of owing them money.
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