MIAMI (CBSMiami) — This year, tax day falls on April 18th. That’s tomorrow!
Whether you’ve filed already or will work through the night to get your return sent in, chances are you’re getting a refund!
The IRS expects more than 70% of taxpayers will get tax refunds this year.
Last year, 111 million refunds were issued, with an average refund of $2,860.
So how should you spend that money if some of it is coming your way?
Today’s Lauren’s List offers the advice straight from the financial experts.
- Pay down debt: American consumers added $89.2 billion in credit card debt to our collective tab in 2016, the third-largest annual increase in the last 30 years. WalletHub projects that outstanding credit card balances will blow by $1 trillion in 2017. If you’re like the average household, which owes about $8,300 in debt, your estimated $2,800 tax refund could save you more than $600 in interest depending on your rates.
- Build your emergency fund: Some money gurus say your emergency fund should have at least $1,000 in it before you even start paying down debt. After all, what good is paying off debt if you just have to use a credit card to pay for stuff in the event of an emergency? If you don’t yet have a financial safety net, using your refund to get your emergency fund balance up is a good idea.
- Make a retirement contribution: A com survey from last year found 56% of Americans have less than $10,000 saved for retirement and 42% of millennials report having no retirement savings at all. Open an Individual Retirement Account or 401-K, or contribute to them if they’re already set up. That contribution may provide the added bonus of a tax deduction, meaning more money for you in the long haul.
- Treat yourself: Yes, it’s ok to also use your unexpected windfall to splurge on something you want, so long as all of your other financial commitments are met. But if you find that you get a sizable refund year after year, the best idea may be to adjust your withholding allowances, so you have that money to spend year round, instead of just come tax time.