Spend or Save? Five Ways to Make the Most of Your Tax Refund

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Spend or Save? Five Ways to Make the Most of Your Tax Refund

WASHINGTON, April 14, 2014 /PRNewswire-USNewswire/ -- As tax season

comes to a close, approximately three-in-four taxpayers will receive a

refund from the IRS. While millions of Americans eagerly await their

reimbursement check from Uncle Sam, the American Bankers Association

has highlighted five tips for making the most of their tax refund.

"Using your tax windfall wisely can start you on the path to long-term

financial stability," said Frank Keating, ABA president and CEO.

"Before you splurge on a vacation or a 60-inch LED HDTV, it's

important to honestly evaluate your financial situation and consider

investing the refund in your financial future instead."

Below are ABA's key tips for consumers looking to put their tax refund

to good use:

-- Save for emergencies. Open or add to a high-yield savings account

that serves as an "emergency fund." Ideally, it should hold about

three-to-six months of living expenses in case of sudden financial

hardships like losing your job or having to replace your car.

-- Pay off debt. Pay down existing balances either by chipping away

at loans with the highest interest rates or eliminating smaller debt


-- Save for retirement. Open or increase contributions to a

tax-deferred savings plan like a 401(k) or an IRA. Where can you get

one? Your bank can help set up an IRA, while a 401(k) is


-- Put it toward a down payment. The biggest challenge that most

first-time home buyers face is coming up with enough money for a down

payment. If you intend to buy a new home in the near future, putting

your tax refund toward the down payment is a smart move.

-- Invest in your current home. Use your refund to invest in home

improvements that will pay you back in the long run by increasing the

value of your home. This can include small, cost-effective upgrades

like energy-efficient appliances that will pay off in both the short

and long term. If you have more substantial renovations in mind, your

bank can help with a home equity line of credit (HELOC).

For more consumer tips and resources on topics such as mortgages,

credit cards, protecting your identity and saving for college, visit

ABA's recently launched consumer website-ABA.com/Consumers.

SOURCE American Bankers Association

-0- 04/14/2014

/CONTACT: Mike Townsend, 202-663-5471, mtownsend@aba.com

/Web Site: http://www.aba.com/

CO: American Bankers Association

ST: District of Columbia



-- DC04664 --

0000 04/14/2014 15:31:00 EDT http://www.prnewswire.com

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