Sure, filing taxes is a pain. But what’s not a pain is that refund check on the other end, if you’re lucky enough to get it. Americans get an average of $2,705 in tax refunds – which is a substantial windfall, especially these days. So if you’re wondering what to do with your check when it arrives, our money pros have some ideas.
Gregg Fisher, president and chief investment officer of Gerstein Fisher, recommends paying off any credit card debt with a high interest rate first and foremost. Then make sure you have enough in your emergency fund (at least one year worth of living expenses sitting in cash or a money market, he says). Then there’s college savings plans, retirement savings and then – and only then – you can consider investing in the stock market if you still have liquidity. But pay the debt off first.
Brian Jones, vice president of CJM Wealth Advisers, has three words: cash, cash, cash. Get an online savings account that is FDIC insured (just Google it), deposit the refund and let it work for you.