How to Make the Most of Your Tax Refund! Robin Seemann-AFC, Director Economics, Education & Empowerment Program

What to Do?

BE SMART! An income tax refund can never come at a bad time. The only hard thing about getting money is deciding how to spend it. You could always blow it on some gadget you'll forget about in a month. Or, you can spend your tax refund on something that will benefit you in the long run by strengthening your financial situation. If you're due a refund, here are some smart ways to spend it!

You Received a Large Refund The PROBLEM IS: Ohio Department of Job & Family Services – SNAP benefits – Food Stamps –Limits your resources: –$2000 in Countable Resources such as bank accounts is permitted to still qualify for your foodstamps –So now what?

Be Savvy with those Funds While you can only maintain a limited amount of resources, there is still the ability to save. FEED THE PIG! Start and Emergency Savings Account: –You should have enough money saved to cover one months expenses – if not all of the expenses – At least enough to cover housing, transportation and necessities – –$ $1500 Saved!

FEED THE PIG Putting your refund away for a rainy day is a wise decision. It keeps you from having to use your credit card when you face a financial emergency. Without a lump sum to jumpstart your emergency fund, it could take you months to set aside enough money for your emergency fund

Have you saved enough for your short-term goals Are you planning on taking a vacation this year, or do you plan on blowing it out for the holidays? If you are planning something and you answered “no,” then dump your refund into an account specifically dedicated to an annual vacation or holiday fund. This will make sure you don’t have to go into debt to go to the beach or buy presents.

Pay Your Rent & Car Payment in Advance Instead of blowing the cash all within 30 days and not having much to show for: –Pay your rent or mortgage ahead by a few months –Pay your utilities ahead –Pay your car payment ahead This could improve your creditrating Doing this will always keep you ahead of the game. Being ahead will also be helpful if an emergency should arise.

PAY OFF DEBT! The best investment most borrowers can make is to pay off consumer debt with double-digit interest rates. For example, if you have a $3,000 credit card balance at 19.8%, and you pay the required minimum balance of 2% of the balance or $15, whichever is greater, it will take 39 years to pay off the loan. With accumulating interest, you will pay more than $10,000 in interest charges

Answer your phone & pay your bills! Tired of late notices and debt collector phone calls? Avoiding them doesn't make them go away; it simply prolongs the collection process and damages your credit in the process. Use your tax refund to take care of those late bills. Your credit score will thank you and you'll thank yourself for finally getting rid of annoying collectors.

STOCK NECESSITIES Buy those non perishable taxable items and groceries: you know you are going to need – detergent, hygiene products, paper products etc. Are there any household appliances that you need. Buy smart items that you know you need

PURCHASE WORK AND SCHOOL CLOTHING Without a doubt – you will need work or school clothing for yourself or your household members. Buy them now so there will not be a hardship at a later date! Perhaps buy some birthday and Christmas presents ahead of time: This can save the heartache of choosing to pay rent, utility and car payments – verses buying presents – ONLY to have, late fees disconnect notices or repossession conversations come up!

How RELIABLE is Your Transportation? Are struggling to get to and from work, school, grocery stores, doctors offices, church or any other place? Do have to depend on others? If you have a vehicle is it giving you maintenance issues or worth fixing? Are you leery of applying for credit due to past poor credit decisions you made?

How RELIABLE is Your Transportation? There is an affordable option for financing a vehicle if you are a working parent The option provides opportunity to establish or re-establish credit (and the rate is only 8%) Contact The Ways to Work Loan Program at ext 200 for an affordable character based auto loan. Make your DREAM of car ownership a REALITY

Treat yourself, but don't OVER DO it. How fun would life be if you only spent your money on bills? It's ok to spend money leisurely, but remember, there's a balance. The key Take care of your responsibilities first, then enjoy your money second. Before you spend a dime of your tax refund, make a plan for how you're going to spend the money.