Editor’s Note: This information appeared on the Consumer Financial Protection Bureau’s website. Click here to see the original post.
It’s tax season again. If your rainy-day fund could use a little boost (or needs to be started!), this time of year can be a good opportunity to take a significant step towards saving.
Saving all or part of that refund can help you prepare for unforeseen expenses throughout the year or perhaps reach a larger savings goal.
Here are some easy ways to get started…
- Estimate your refund. Think about how much you might get back in a refund, based on what you received last year. Keep in mind, there were several changes to the tax laws in 2018. Find out how these changes might impact your refund this year.
- Identify and prioritize your bills. This includes essentials like rent and utilities, as well as bills you would like to pay off or pay down. If you need help, the Consumer Financial Protection Bureau (CFPB) has several helpful worksheets to track your spending and get a handle on your debt.
- Plan for special purchases. Does your car need new tires? Do you have a tuition bill coming up? Consider using part of your tax refund for important, non-negotiable costs.
- Calculate what remains. Add up your expenses, payments, and purchases to see what you might have left over from your refund.
- Make a plan to save. Set a goal to save a portion of what’s left over from your refund. Use the CFPB’s tax time worksheet to help you design your plan.
- Finally, decide where you want to put your savings. Do you have a separate account or another way to set money aside? Make sure to have both your account and routing numbers available when you file your return. Rather than waiting for a check, the IRS can often directly deposit your refund into this account.
Need a simple, low-cost account to help you save?
If you need a tool to help you save, our Statement Savings account is here to help. It’s only $25 to open and there’s no monthly fee if you keep your balance above $100. Contact your local branch to find out more.