Income tax refunds have been rolling out. Uncle Sam sends Mississippians an average income tax refund of $2,922, according to IRS data. You might want to hold on to some of that cash for unforeseen occurrences.
Refunds are wages you earn throughout the year and should be thought of as hard-earned money rather than extra money to use without thought.
It is wise to stash some of your refund away in an emergency fund, should an emergency arise. Use some to pay down high-interest debt, which in turn will save you more money over time.
Here are some financial tips that may help you spend your refund wisely:
• Save part of your refund for emergencies. Save $500 to $1,000 or more for unexpected repairs or medical bills that could create a financial crisis and add to your debt.
• Jump-start a savings account with part of your refund. Have some of your refund electronically deposited into a savings account. You can have your refund direct-deposited into more than one account using IRS Form 8888. Set up a savings account before you file your taxes, if you don’t already have one. Have your account and routing number with you when you go to your tax filer.
• Pay down high-interest debt with some of your refund. If you have more than one credit card, pay off the card with the highest interest first.
For more information, contact the local county extension office at 453-6803 or Jennifer Russell at 662-334-2669 or jtb20@msstate.edu.
• Jennifer Russell is the county coordinator and a child and family development Extension agent for the Washington County MSU Extension Service Office in Greenville. You may contact her at 662-334-2669 or jtb20@msstate.edu.
